What is Berlusconi up to?

Berlusconi sentence intensifies power struggle – FT.com.

Italy’s Berlusconi Convicted in Fraud Case – WSJ.com.

BBC News – Berlusconi ‘obliged’ to stay in Italian politics.

UPDATE 3-Berlusconi threatens to bring down Monti government | Reuters.

Berlusconi Says He May End Support for Monti’s Government – Bloomberg.

Berlusconi Threatens to End Support for Monti and Shake Up Italy – Businessweek.

As Thousands Of Italians March Against Austerity On “No Monti Day”, Berlusconi Threatens To Scuttle Monti Government | ZeroHedge.

Berlusconi claims that he does not wish to be prime minister of Italy again, and it does not seem he has the support. However, his latest comments will surely cause market disruptions come Monday unless there is backtracking on Sunday.

He is still in control of his party and would be able to make the government fall by withdrawing support for the coalition led by Monti. It is unclear what this would accomplish. The fall of the technocratic government would cause immediate harm to Italy by jacking up bond yields; this would also affect the other periphery countries.

Perhaps, he is just being spiteful. He is quite angry and the way he was treated by Merkel and Sarkozy last fall. Merkozy’s treatment was precipitated by Berlusconi withdrawing support for promised Italian reforms after ECB bond buying had managed to lower yields.

The former prime minister has proven to be wily. The periphery countries are suffering from austerity fatigue. It is only a matter of time before one politician promises to  chuck austerity and the euro to garner support.

This position would put the first country threatening to do so in an advantageous position before German elections, and he would love to stick it to Merkel.

Berlusconi could approach Merkel and tell her that he wants an unconditional bailout for Italy, or it will leave the eurozone. By the way, good luck in the election.

Only an Italian would run for political office for spite or revenge.

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