Row erupts in Italy over Berlusconi

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On Wednesday 6 July 2011, 8:44 EST

Premier Silvio Berlusconi on Tuesday hastily withdrew a controversial measure buried in Italy’s 47 billion euros ($A63.94 billion) austerity plan that would have allowed his family investment company to avoid paying a heavy fine, at least temporarily.

Opposition politicians and magistrates had expressed outrage at the measure, which was meant to keep companies from having to pay especially high fines as long as appeals were pending.

If passed, the measure would have allowed Fininvest, the holding company for Berlusconi’s family assets, to at least delay paying a 750 million euros ($A1.02 billion) fine it was given two years ago for alleged corruption in the takeover of publishing house Mondadori in the 1990s.

Despite withdrawing the measure, Berlusconi defended it as not only “just but necessary.”

The payment of “enormous sums” with appeals still pending could create financial difficulties for companies or individuals, without any guarantee that the money would be returned if the award was modified at a later stage, he said.
“The opposition promoted a new crusade against this measure thinking that, among the thousands of potential beneficiaries, it could also apply to a company within my group,” Berlsuconi said.

The premier complained that the amount Fininvest had been ordered to pay exceeds the value of its share of Mondadori. He expressed certainty that the award would be overturned on appeal. A decision is expected this week.

The existence of the measure was reported in Italian newspapers Tuesday, and came to light during a review of the austerity package by the Italian president’s office.
The Finance Ministry had no immediate comment, though it cancelled a presentation of the austerity plan on Tuesday, while President Giorgio Napolitano told reporters that he would not comment on the package until the review was complete.

Berlusconi ally Foreign Minister Franco Frattini said the measure was general and not aimed at protecting anyone in particular.

“If I understand correctly, it is a general measure,” Frattini was quoted by the news agency LaPresse as saying, adding that it didn’t receive much attention in the Cabinet.
The government approved the austerity measures last week to show financial markets and the European Union that it is serious about balancing its budget. It must be approved by Parliament.

The three-year-plan aims to bring the government’s budget deficit of 3.9 per cent this year to near-balance by 2014. It includes new taxes on financial transactions, tax breaks for young entrepreneurs, extending a public sector hiring freeze and cutting ministries’ budgets, as well as measures to fight tax evasion.

Opposition politicians said the measure benefiting Berlusconi’s family violated the wishes of voters, who demonstrated in last month’s referendum that they think the premier does not deserve special treatment. Voters overwhelmingly killed a law that partially shielded Berlusconi and other top officials from prosecution while in office.

Shares of Berlusconi’s Mediaset media company, controlled by Fininvest, were down 1.6 per cent to 3.25 euros in Milan.