News Analysis: What spectre of Berlusconi says about Italian democracy

It sounded like the Return of the Mummy. In the past week a legal loophole apparently designed to exhume the career of three-time premier Silvio Berlusconi came as a shock to Italians who had believed that the mogul and convicted criminal was, politically speaking, dead and buried.

News slipped out that imminent tax legislation, which decriminalizes dodged tax payments below three percent of earnings, could, if applied retrospectively, reverse the tycoon's August 2013 conviction for tax fraud.

This would see Berlusconi's ban on public office annulled, and it wasn't long before there was talk of the billionaire once again standing for office.

Within the coalition government of Matteo Renzi everyone appeared to blame someone else for the mess. Some observers even suggested that the "save-Berlusconi" part of the decree had been inserted to embarrass Finance Minister Pier Carlo Padoan and scupper his chances of becoming head of state when President Giorgio Napolitano finally leaves the Quirinale Palace later this month.

The prospect of Berlusconi having his criminal record cancelled remains improbable. But as the row grew over whether oversight or conspiracy was to blame, a red-faced Prime Minister Renzi suspended the decree until after the February presidential elections and also promised to rewrite the controversial legislation.

Pundits said, however, the fact that press and public were still talking about 78-year-old Berlusconi, as the main centre-right opposition figure, spoke volumes about the state of Italian democracy, and in particular, the lack of a modern centre-right that is fit for purpose.

"Italy needs to have an effective centre-right," said professor Francesco Giovazzi, an eminent economist at Milan's Bocconi University, "The trouble is there's never been anyone to replace Berlusconi."

But professor Alberto Martinelli, a political scientist at Milan University, said that having Berlusconi remain on the scene, suited centre-left Renzi perfectly. "It's just what Renzi wants, a weakened centre-right figure to fight in the next election."

Berlusconi is still the leader of the biggest centre-right grouping, Forza Italia. But holed-up for the most part in Arcore between community service sessions (in punishment for tax evasion), the mogul has been kicked out of parliament and has all but vanished from the TV screens.

And Forza Italia appears to be sinking. In December it was reported that party membership had collapsed from a high of 400,000 to just 60,000. Accounts were in the red and it had just sacked 50 workers.

Instead it is the Northern League that is now making the running on the Italian right. Created as a federalist, anti-corruption party, it has now re-positioned itself as an anti-immigrant, anti-euro force under its young, down-to-earth and media-friendly leader Matteo Salvini, who appears on television constantly, wearing a "Stop Invasione" tee-shirt (referring to immigration of non-whites into Italy). Following this week's murders of Charlie Hebdo journalists in Paris, Salvini was, predictably, talking about a war between Islam and the West.

The other populist force in Italian politics, Beppe Grillo's Five Star Movement (M5S), is not far behind. Grillo has joined Salvini in calling for Italy's exit from the euro. Grillo has also ramped up the xenophobia to win votes.

Political expert Sergio Fabbrini of Rome's LUISS University, says that the Italian right is now going "through a period of transformation." However, those hoping for a modern, socially liberal centre-right of the kind that has emerged in the other major western democracies, including Germany and France, might be disappointed.

The big question is whether Berlusconi's Forza Italia will be dragged into right-wing populism by Salvini, or will it, as Renzi hopes, remain, or perhaps become, a mainstream centre-right party, and allow politically fractious Italy to adopt the two-party system seen in Britain and America.

Fabbrini said this probably all depends on the outcome of electoral reforms. But the fact Renzi is doing a deal with Berlusconi over changes to the electoral system further fuelled suspicions over this week's Berlusconi-friendly tax decree.

The Italian think tank Policy Sonar tended towards the conspiracy theory over the "save Berlusconi" decree. It said that with the Italian economy still "a shambles," and his grip on the power weakening, Renzi desperately needed a success under his belt, and it suggested getting deal on electoral reform with Berlusconi's help, was the best chance of achieving this.

"Renzi knows that he needs a bespoke electoral law ... The easiest way to secure that in the short run is to leverage institutional support from Berlusconi and Forza Italia."

But if Berlusconi turns his back on Renzi and his party tries to compete against Salvini, the Italian right, which is already flirting with anti-EU sentiment and xenophobia, could get very ugly indeed. Endit