DESPITE THE swift enactment of an austerity package last week and despite the fact that Italian banks appeared to do well in European Central Bank stress tests, the Italian stock exchange experienced heavy losses yesterday.
The poor returns came on a Monday when Italian prime minister Silvio Berlusconi experienced further setbacks in two important court cases, also in Milan.
At the close of trading, the Milan All Share index was down 2.87 per cent, while the spread between Italian and German bonds stood at 329 points, marginally lower than the new high touched early last week.
Shares in leading Italian banks also traded badly, with Unicredit losing 6.36 per cent, Monte dei Paschi 7.16 per cent and IntesaSanpolo dropping 6.63 per cent.
Opposition figures were quick to argue that the bad day on the markets was proof that Mr Berlusconi and his government had become a problem for Italy: “It’s obvious, and the stock exchange and the markets have made the point today, that it is the Berlusconi government which is Italy’s problem. And for that reason, it is clear that there is nothing this government can do to help the country find the necessary inspiration to effect a recovery … The problem is the credibility of Berlusconi and his ministers”, said Senator Anna Finocchiaro of the Democratic Party (PD).
Not far from the Milan bourse, Mr Berlusconi encountered other problems when judges presiding over two separate court cases appeared to rule against him. In the so-called “Rubygate” sex scandal case, the court rejected 16 objections raised by defence lawyers. In particular, the court argued that it had every jurisdictional right to hear the case rather than hand it over to the parliament-based tribunal of ministers.
With regard to the infamous phone call that the prime minister made to a Milan police station on the night of May 27th last year to obtain the release of Karima “Ruby” El Mahroug, the court rejected the defence claim that Mr Berlusconi had been acting in his role of head of government.
Stating that “all citizens are equal in the eyes of the law”, the court said it would be a “mistaken conclusion” to claim that crimes committed by a member of government, abusing his position, were done in the “exercising of his government functions”.
Furthermore, the court rejected the defence’s call for the case to be transferred to Monza, the province closest to Mr Berlusconi’s Arcore mansion, where the alleged underage prostitution offences were committed. The court argued that the “abuse of office” charge relative to his May phone call was a more serious charge and since that took place in a Milan police station, then the case should be heard in Milan.
Mr Berlusconi also featured in another Milan court yesterday when the so-called “Mills” corruption case resumed.
Here too judges ruled against him, refusing to accept a witness considered fundamental by the defence. The “Rubygate” and “Mills” cases are set to resume on October 3rd and September 19th respectively.