It was only last week when rumors that Italy's Finance Minister Giulio Tremonti was about to step down due to irreconcilable difference with the man who puts DSK's (alleged) sexual exploits to shame, pushed down Italian bank stocks. Today, The Guardian picks up where last week left off, and brings us the following scene from a real life version of The Office, wherein we learn that Tremonti, who now is hated in Italy and will soon join the Greek Finance Minister in being the target of a massive scapegoating campaign that will likely end in his termination, has just threatened to quit if calls for his resignation don't subside. Yes, it didn't make much sense to us either but whatever.
The Guardian brings the blow by blow:
His government colleagues can't stand him and Silvio Berlusconi wishes he could do without his deficit-obsessed finance minister who won't allow him to spend the money he hasn't got. Many Italian members of parliament blame him for the failure of the right in recent municipal elections and referendums. But Giulio Tremonti, who presented a €43bn ($62bn) austerity plan last week to balance the budget by 2014, believes that he is indispensable and without him, Italy would rapidly join the Pigs (Portugal, Ireland, Greece and Spain).
A former tax adviser, Giulio Tremonti, 63, has been finance minister in all four of Berlusconi's governments since 1994. Respected by the church as well as in business circles, and liked by Italians, he is the antithesis of his boss, and is known to tender his resignation at the slightest disagreement. Berlusconi, quite aware that Tremonti is his best asset on both the domestic and international front, refuses it each time.
To achieve his ends, Tremonti threatened to leave his ministry once again. "Do you want Italy to take the same road as Greece? If that's what you want, I'm leaving," was his reply to the complaints in his camp, notably by coalition Northern League MPs who would have preferred tax cuts. One minister even judged Tremonti's plan "worthy of a psychiatrist". Three meetings of senior government members were held before everyone finally agreed.
In the end the ratings agencies, highly criticised by Tremonti, came to his rescue. By threatening to downgrade their ratings on Italy because of its massive budget deficit (120% of GDP) and poor growth (0.1% in the first quarter), Standard & Poor's and Moody's obliged Berlusconi and his allies to pass another painful austerity plan, following a €25bn one in 2010.
At least with Greece it is the entire government that is holding the gun against its head and threatening to blow its head off if it doesn't get what it wants. Italy, naturally, had to take the soap opera just that much further, by making the split not between the government and the bankers, but between various factions within the government itself. And with Berlusconi's days potentially numbered, will Italy be the first country to openly usher in austerity only to realize it is not all fun and games. And lastly, should Tremonti really pull the trigger and quit, those ASSGEN CDS are going to come in very handy.