PM caught calling Italy “this shitty country”

Italy's billionaire prime minister Silvio Berlusconi has been caught insulting Italy as “this shitty country” in a telephone intercept.

His comments, which made headlines in newspapers on Friday, come as he desperately attempts to introduce an austerity package to save Italy's perilous finances and even, ultimately, the euro, the Financial Times reports.

Berlusconi has claimed he was just joking when he made the comments – caught in an intercepted telephone conversation with a former newspaper editor prosecutors believe was involved in an attempted blackmail of Berlusconi for more than half a million euros, the Financial Times reports.

Berlusconi’s already faces three court trials in a damaging sex scandal as he struggles to maintain authority.

On Thursday a man and his wife accused of supply prostitutes to Berlusconi for his private parties were arrested in relation to an alleged prostitution ring.

Berlusconi is accused of attempting to bribe the man, Giampaolo Tarantini, to enter into a plea bargain over a prostitution case to avoid going to trial, the New York Times reports.

Giulio Tremonti, finance minister, presented the latest compromise version of the budget late on Thursday, which is to be debated in parliament next week, FT reports.

The package relies heavily on a renewed crackdown on tax evasion to reach the goal demanded by the European Central Bank of a balanced budget by 2013.

“It is therefore essential that the objectives announced for the improvement of public finances be fully confirmed and implemented,” he said in an interview with Il Sole 24 Ore, Italy’s main business daily.

FT reports:

In Brussels, the European Commission took the unusual step of expressing concern over the budget while its passage was still uncertain. “We are worried to see a heavy reliance on the fight against tax evasion in this new package,” it said. “The effectiveness of these measures is always very hard to assess.”

Italy’s main business lobby attacked the proposed budget as “weak and inadequate”, while the largest trades union federation has pledged widespread disruption through strike action on Tuesday, when the senate is due to debate the measures.

While taking such criticism on board, a senior and independent economist involved in the budget pointed out that the package does impose severe spending cuts on government ministries and local authorities next year. It also drives up personal taxes by slashing exemptions and imposes tax increases on energy companies.

The fundamental issue, the economist said, was whether Mr Berlusconi commanded enough political clout to implement the cuts and the moral authority to squeeze more taxes out of Italians while on trial himself for tax fraud, as well as corruption and paying for an underage prostitute.

Berlusconi has denied all charges and has accused magistrates of being politically driven.

He has denied being the victim of blackmail and says he happily gave the money to Giampaolo Tarantini – a prosthetics businessman convicted for drugs dealing who has admitted to supplying prostitutes for the prime minister’s private parties without Berlusconi being aware of their backgrounds.

Police arrested Tarantini and his wife on Thursday in a Rome apartment which was allegedly paid for by the prime minister, FT reports.

Tarantini denies the blackmail charges.

Denouncing the judiciary’s use of telephone intercepts and their release in court documents, Berlusconi insisted on Thursday night that he had no intention of quitting.

Allegations of blackmail were the “pure fantasy” of magistrates, he told reporters. “I am staying to change this country,” Mr Berlusconi said.

But the Naples prosecutor Francesco Greco called “credible” an account that appeared in last week’s edition of the newsweekly Panorama, which is owned by Berlusconi,  which said Berlusconi had paid Tarantini, about $715,000, as well as monthly payments, to encourage him to strike a plea bargain to keep a prostitution ring case in Bari from going to trial, the New York Times reports.

In that case, Tarantini admitted that he had paid a prostitute and other women to attend parties at Berlusconi’s residences.

A trial would have the potential of uncovering yet more unsavory details of Berlusconi’s dalliances, NYT reports.

He is already on trial in Milan, accused of paying for sex with an under-age Moroccan woman. He denies wrongdoing.

The NYT reports.

Berlusconi told Panorama that he did not deny the payments, but that he had simply wanted to help Mr. Tarantini, “who found himself and still finds himself in very serious economic difficulty.”

“I have nothing to repent,” Mr. Berlusconi told Panorama. “On the contrary. I did nothing illicit. I limited myself to helping a desperate man without asking for anything in exchange.”