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Berlusconi’s legacy: Christian Europe united by a free market spirit

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Italy was the most important country where an ‘anti-fascist consensus’ was established after the Second World War, albeit at an official level. The adoption of universal suffrage, the creation of the Constituent Assembly and the drafting of the Constitution were participated in by all the forces involved in the antifascist liberation struggle. The anti-fascist struggle in Italy had also turned into a war of liberation with the occupying Nazi Germany and the establishment of the collaborationist ‘Salo Republic’.

“Albeit at the official level” we said. Although the Italian Communist Party (PCI), the main organization of the partisans who were the vanguard of the anti-fascist resistance, was included in this consensus, the regime in Italy was controlled by a party of order, with the Christian Democrats (DC) at its center, at the behest of the US and NATO. This party of order did not hesitate to use its striking power against the communists through Gladio and the mafia. The PCI, even though it did not seek power, was another country within the country, another society within Italian society. Its prestige was high due to its sacrifices in the resistance. It was organized within the working class. In the 1976 elections, it received 34.4 percent of the vote and caused considerable fear in the establishment.

This, roughly speaking, reflected the balance of forces in the Italian First Republic. In the 1980s, two important transformations began to take place: First, the Italian establishment shifted to a strategy of high interest rates and currency devaluation, with the plan of full integration into the European common market. This was a strategy with which we were very familiar: Under the guise of ‘competitiveness’, lowering labor costs, cutting consumption of working people, reducing access to credit for small producers, intensive financialization and a partial transfer of sovereignty to Brussels. The second and perhaps more surprising development was the rapid adaptation of the PCI to these austerity policies. Italian communism may have begun to poison itself earlier, but it meant that a critical threshold had been crossed. It is very telling that the PCI’s vote in the last elections in 1987, in which it participated as a party, fell to its lowest level in 20 years.

It meant that the balance of forces on which the First Republic had been based was overturned. With the end of the Cold War, the corruption, nepotism, state-mafioso collaboration of the Italian Socialist Party (PSI), which was one of the wings of the party of order along with the DC, was being exposed. This period, known in our country as the ‘Clean Hands’ operation, marked the end of the First Republic in Italy and ushered in the ‘magistrate’ rule.

It was around this time, as the magistrate administration was running out of steam, an unknown boss announced that he would take the field to ‘fight communism’.

But was there communism left?

The PCI refashioned and renamed itself the Party of the Democratic Left (PDS). Considering the PDS reformist, the revolutionaries formed the Communist Refoundation Party. The latter group was also appreciated decently by former PCI voters. The 1993 local elections resulted in a decisive defeat for the DC and a partial victory for the PDS.

So Silvio Berlusconi began his fight against communism with the local election victory of the men of order in ties who were in fact whipping a dead horse. He declared the end of ‘party politics’ for Italy and said that the country would be governed by ‘completely new people’ in the new era. There was no more ‘popolo’ (people), there was ‘gente comune’ (ordinary people). The fate of Italy would no longer be decided by the people, but by the ‘free association of the electorate’. Against the ‘cartel of leftist forces’, he called for a ‘pole of freedom’ that would combine free enterprise and love of work with the family values of Catholic Italy.

Berlusconi was waging a war against the ‘traditional elites’ (i.e. those entrenched in the balance of power of the First Republic) and demanding an end to the Clean Hands operations.

Berlusconi challenged politics and politicians, arguing that only with a business spirit could the state become functional again.

It should not be surprising that the Lega, one of the critics of this ‘cumbersome state-business spirit’, today forms a coalition with Berlusconi’s party. It should also come as no surprise that a large proportion of DC voters in the First Republic voted for Forza Italia. After the electoral law was changed in 1993, there was a shift towards American-style two-party rule. Here Berlusconi took his place on the Italian political scene as the main element that carried the old DC mass base into the new era. In the Second Republic, where the mass base was marginalized and organizational politics was declared redundant, personalities came to the fore, and the figure of the leader who came into contact with the ‘electorate’ took the place of the man of the organization. The late Berlusconi was also working to establish this order. His media empire was the most important tool in creating a ‘charismatic’ figure. He would recreate the Italian right in his own image.

Contrary to what those who referred to him after his death as a ‘lover of national sovereignty’ might think, like all Italian parties in the 1990s and 2000s, he saw the EU as an external element that would ‘normalize’ Italy, as a tool that would free the state from sluggishness by forming fiscal discipline.

Together with his alliances with the Brothers of Italy and the Lega, he worked hard to establish an ‘anti-political’ right-wing discourse, now called the ‘post-fascist consensus’. His aphorism “Mussolini was not that bad dictator” describes this consensus well. The anti-fascist insurgents, the main engine of the First Republic, are now portrayed as just as brutal, cruel and violent as the fascists. Fascist shock troops and anti-fascist partisans deserve to be referred to together as ‘children of this land’. It is such a farce that the President of the Senate, Ignazio La Russa of the Brothers of Italy, who said that there was no anti-fascism in the Italian Constitution, was able to attend the ‘Liberation Day’ ceremonies a few days later. Even worse, the same Russa still has a bust of Mussolini in his house, an heirloom of his father.

It was unthinkable that this consensus, which had been reinforced by the PDS’s shift to the ‘center’, would not be shaken by the 2008 crisis. The first solution to this crisis was the domination of technocratic governments, adherence to Brussels and the mania for privatization. The technocratic governments imposed on Italy a wave of marketization that even Berlusconi at times hesitated to undertake. This period saw the disintegration of parties on the left and the right: The Democratic Party and Berlusconi were losing. Meanwhile, the mafioso leader was being investigated for corruption (a commonplace in Italian politics) and sidelined. By the 2018 general elections, the combined vote of the Democratic Party and Forza Italia did not even reach 33 percent. Henceforth, the 5 Star Movement (M5S) of comedian Beppe Grillo, an internet phenomenon, and the Lega, which took an ‘Italian nationalist’ position by trying to disassociate itself from the north, were at opposite ends of the political theatre. The M5S leader at the time, Luigi Di Maio, was not afraid to state the obvious: The Second Republic dominated by Berlusconi and the ‘center-left’ was dying.

That he is the symbol of the Second Republic should not mislead anyone. He always had friends in the First Republic too. Although he was never a member, he had very good relations with the PSI, the party of order of the first republic. With the collapse of the Second Republic, the fact that he managed to reinvent himself and throw himself into the right-wing coalition should be considered a success.

From now on, it seems inevitable that Forza Italia will be swallowed up by the other coalition partners. If the matter is charisma, Meloni and Salvini seem to have it all. Moreover, he seemed to have overcome his occasional polemics with Brussels: At the party congress, which he attended from his sickbed, he emphasized European unity against ‘Chinese imperialism’, differentiated his party from the likes of Marine Le Pen, and secured his place in the ‘center-right’ European People’s Party (EPP) in the European Parliament. This is the ‘legacy’ of the Second Republic and Berlusconi’s death: Christian Europe and Italian values, united by a free market spirit.

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German defense minister clears way for Scholz to lead SPD into elections

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Defense Minister Boris Pistorius has officially withdrawn as the Social Democratic Party’s (SPD) top candidate for the upcoming election, ending weeks of speculation about his potential to replace Chancellor Olaf Scholz.

In a video message released by the SPD on Thursday evening, Pistorius stated that the ongoing public debate had harmed the party’s unity. He informed the party leadership that he was unsuitable for the chancellorship.

“Olaf Scholz is a strong chancellor and the right candidate for the chancellorship,” Pistorius said, emphasizing that the party leader embodies “reason and common sense.” He further urged, “We now have a joint responsibility to bring this debate to an end because there is a lot at stake.”

When Scholz triggered early elections two weeks ago, many assumed he would automatically serve as the SPD’s candidate, given his role as the incumbent chancellor. However, polls revealed that Pistorius, who has been defense minister since early 2023, had become Germany’s most popular politician, sparking a de facto leadership race.

Scholz faces declining approval ratings

In contrast to Pistorius’ popularity, Scholz suffered from one of the lowest approval ratings among German politicians. Voters blamed him for months of political infighting that crippled the three-way “traffic light” coalition, which ultimately collapsed earlier this month.

Despite this, the SPD central leadership continued to back Scholz. Meanwhile, Pistorius faced increasing criticism for failing to address the leadership speculation. In his video message, Pistorius denied initiating the controversy but acknowledged that it had caused “growing uncertainty” within the party and “resentment” among voters.

He emphasized that the decision to step aside was his own and pledged his full support to Scholz, whom he described as an “extraordinary” chancellor. Pistorius also affirmed his commitment to campaigning for the SPD’s re-election.

Supporters react with disappointment

Pistorius’ withdrawal left many of his supporters disheartened. “I regret this development. The aim now must be to work together and achieve the best possible election result for the SPD,” said Joe Weingarten, an SPD member of parliament, in an interview with Der Spiegel.

Another MP, Johannes Arlt, remarked, “I would have preferred a different decision, but now we have one. It is good for the party and the country. We will now go into the federal election campaign united.”

A two-way race for the chancellorship

With Pistorius stepping down, the race for the chancellorship is now expected to be between Olaf Scholz and Friedrich Merz, leader of the opposition Christian Democrats (CDU). Merz, a millionaire and former BlackRock Germany executive, has been polling ahead of Scholz since taking over the CDU leadership in 2022. Scholz’s supporters, however, remain optimistic that he can close the gap and outperform Merz in the upcoming election.

Pistorius: A proponent of German remilitarization

Known for his pragmatic approach to military affairs, Pistorius, 64, earned respect for his tough stance on Russia and advocacy for Germany’s rearmament. Following his appointment as defense minister in 2023, he made clear his opposition to the SPD’s historical reluctance to increase military spending.

Describing Vladimir Putin as “the despot in the Kremlin,” Pistorius warned that Germany must boost defense investments and ensure it is “combat ready.” His hardline approach on security and defense issues distinguished him within the SPD and cemented his popularity among voters.

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Poland urges EU to increase spending on eastern defence

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Poland, NATO’s largest defence spender, has urged its EU partners to bolster border defences with Russia and Belarus. The move aims to demonstrate a firm commitment to European security, particularly in light of Donald Trump’s influence on global defence policies.

Magdalena Sobkowiak-Czarnecka, the deputy minister responsible for preparations for Poland’s EU presidency, set to begin in January, told The Financial Times (FT) that the EU should invest in strengthening border fortifications and air surveillance systems under the Eastern Shield initiative.

“I think solidarity on the Eastern Shield could help show Trump that, as the EU, we understand what needs to be done for defence. If Trump says he will only work with countries that invest in defence, that’s fine for Poland, because we already spend 4% of GDP on defence. But what about the others? Funding the Eastern Shield would demonstrate the shared commitment of European countries,” Sobkowiak-Czarnecka explained.

The Eastern Shield, announced in May, comprises advanced fortifications and air surveillance systems along Poland’s borders with Belarus and the Russian exclave of Kaliningrad. This initiative is central to Polish Prime Minister Donald Tusk’s strategy to counter what he describes as “Russian aggression”, including the “hybrid war” linked to facilitating illegal migration from Belarus into Poland.

The Tusk government has allocated PLN 10 billion (€2.3 billion) for the Eastern Shield as part of broader defence expenditures. These investments will increase Poland’s defence spending from 4.1% of GDP in 2023 to 4.7% by 2025, the highest in NATO and more than double the alliance’s 2% GDP target. In contrast, some EU nations, such as Italy and Spain, have yet to meet this benchmark.

“All our partners must understand that the Eastern Shield is not solely about Poland but also about safeguarding the EU’s borders,” said Sobkowiak-Czarnecka.

Trump’s potential return to the presidency has heightened concerns across EU capitals, given his promises to impose tariffs on the bloc and signals of a potential resolution to the Ukraine conflict that could favor Russia.

Sobkowiak-Czarnecka underscored Poland’s commitment to enhancing EU security on multiple fronts, from increasing military equipment production to countering disinformation and securing energy supplies.

“This Polish presidency comes at a critical juncture. As an expert on Ukraine and one of the strongest U.S. allies in Europe, Poland will be a guiding light in these challenging times,” she concluded.

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European energy market in turmoil: Gas prices reach one-year high

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The European energy market faces significant challenges as natural gas prices soar to their highest levels in a year. A combination of escalating tensions between Russia and Ukraine, Gazprom’s suspension of natural gas supplies to Austria, and colder-than-expected weather has placed substantial pressure on the market.

Industry representatives acknowledge that while sufficient gas supplies exist, the supply-demand balance remains fragile. Negative developments or geopolitical news could quickly trigger additional price surges.

On Thursday, Dutch TTF futures—a key European natural gas benchmark—rose to €48.8 per megawatt-hour (MWh) (equivalent to $538 per 1,000 cubic meters), a level last observed in November 2023. Since the end of the heating season on 31 March, prices have climbed by more than 150%.

The price surge accelerated on Wednesday after Ukraine targeted Russian territory using British-made Storm Shadow missiles. By the close of the trading day, prices had increased by 2.5%, reaching €46.8/MWh.

On the same day, the United States issued a warning based on intelligence reports, predicting a major air strike in the region. Following this warning, many Western countries evacuated their embassies in Kyiv.

Adding to the tensions, the Ukrainian Air Force reported that Russia test-fired an intercontinental ballistic missile (ICBM) capable of carrying nuclear payloads. This event aligns with speculation about changes in Russia’s nuclear doctrine and the US’s authorization for Ukraine to target Russian territory with long-range missiles.

While liquefied natural gas (LNG) demand in Asia remains low, traders are turning their focus to Europe to capitalize on surging prices, according to Bloomberg.

Despite the increased volatility, Gas Infrastructure Europe reports that gas storage facilities across Europe are 90% full. However, the heating season, combined with freezing temperatures in Northern Europe, has amplified concerns about market stability.

Torgrim Reitan, Equinor’s Chief Financial Officer, emphasized that the market’s fragile balance increases the influence of external factors on pricing dynamics.

The state of pipeline gas supplies from Russia is another major concern. On 16 November, Gazprom halted deliveries to Austria’s OMV, citing unresolved payment issues. The company is attempting to recover part of a €230 million arbitration judgment through this suspension.

Despite this, Gazprom continues to supply 42.4 million cubic meters of gas daily to Europe via Ukraine. However, OMV cannot access these supplies and must turn to other sources, such as Slovakia, to meet Austria’s energy needs. According to OMV officials, Austria’s energy requirements are fully covered by alternative suppliers.

Jon Treacy, editor of the investment newsletter Fuller Treacy Money, noted that although Austria maintains official neutrality, most of OMV’s customers are NATO members. Treacy added that Russia’s “long, cold winter” strategy aims to exert pressure on regions beyond Ukraine over the long term.

Market analysts warn that transit through Ukraine—a minor contributor to the European Union’s total gas imports—could be entirely cut off by January 2024. Such a development would further strain an already delicate market, potentially driving prices even higher.

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