CRI听力:Berlusconi's Resignation and the Future of the EU

The European debt crisis of 2011 was not only an economic disaster but a political firestorm that ended the careers of prominent politicians and threatened the future of the European Union itself.

It not only caused uNPRecedented diplomatic tension within the currency zone but shook the global financial market to its core.

The rising threat of default by heavily indebted European countries spread fear across financial markets and weighed on economies worldwide.

The crisis has centered around 5 nations – Portugal, Ireland, Italy, Greece and Spain who have become known by the unfortunate acronym – PIIGS.

At the beginning of 2011 Greece, Ireland and Portugal had already received bailouts from the EU and austerity measures such as spending cuts and tax increases were passing through their parliaments.

By June world markets were being affected and protests were breaking out across the region.

Demonstrations in Athens turned violent as people protested about proposed spending cuts and tax reforms.

"These measures are destroying the Greek people. Unfortunately, the measures will be passed through parliament. The people on the outside must not accept them. Whatever they vote inside we must not accept it in any form because the people are suffering and our children will suffer."

The European Union convened on several occasions for crisis meetings to discuss the possibility of further bailouts for the stricken countries.

But the crisis was set to get worse as the reality of Italy's debt unfolded.

Smaller countries such as Greece could receive temporary relief from bailouts because despite their overwhelming debt, their economy is relatively small.

Italy on the other-hand has the third largest economy in Europe. Its debt problems have far greater ramifications.

When it became apparent Italy's debt equaled 2.7 trillion US dollars, equivalent to 150 percent of its economic output, fingers started pointing and then Prime Minister Silvio Berlusconi was thrust into the global spotlight.

Until recently Silvio Berlusconi had lived a charmed life.

His business empire spans real estate, media and football.

And Forbes magazine once named him the richest man in Italy.

However, Silvio Berlusconi is no stranger to negative media attention either.

During 2011 alone he made headlines around the world for personal scandals, including his so-called "Bunga Bunga" parties and charges of paying for sex with a minor, in a famed case that became known as "Rubygate."

He was charged with abuse of power over allegations he used his position to have the same girl released from police custody after she was arrested in relation to an unrelated theft.

But Berlusconi denied the charges claiming he was the victim of a campaign by left-wing magistrates.

"It is just an embarrassment, it is disgusting and shameful. I don't know who is going to pay, no one will pay, at the end the state will pay because we know that the magistrates don't take on any responsibility and that is something that needs to be changed and we will change it."

He's also faced numerous tax fraud charges involving his media corporation.

Despite all of this Berlusconi remained defiant and promised to see out his term as Prime Minister until 2013.

However the greatest challenge of his political career came when he was forced to answer to the European Union who had convened emergency meetings to save the Euro.

Berlusconi was accused of completely disregarding the economic weaknesses of his country and hiding the full extent of Italy's debt woes.

He attempted to implement a series of austerity measures to save his country's economy which he presented to the EU during the meetings.

But in the eyes of his country, his parliament and the world it was too little too late and the political career of the longest serving post-war Italian Prime Minister was over.

On November 11, 2011 Italians rejoiced in the street as Silvio Berlusconi stepped down after the Italian parliament passed Austerity measures which included his resignation.

"Clearly it is a moment of great satisfaction, then starting tomorrow we will have to face many problems but we will finally start working on them, so now let us enjoy this moment of satisfaction and happiness."

His replacement as Prime Minister, Mario Monti, an economist with ten years experience as a European commissioner injected some hope into the financial zone.

Amid mounting pressure he immediately set to work on implementing further austerity measures including increased taxes and smarter investments which have been described as severe but necessary.

The European Union's economic and monetary affairs commissioner Olli Rehn has praised Monti's actions as a step in the right direction.

"The priorities set by Prime Minister Monti are the right ones and I fully endorse them: to step up fiscal consolidation, to adopt both measures to relaunch economic growth and to ensure social fairness."

As the New Year rolls around uncertain times still lay ahead and credit ratings in the region are still being cut.

The leaders of France and Germany have called for an overhaul of economic governance in the zone.

However, further political tension arose when UK Prime Minister David Cameron refused to sign a treaty which would have enforced stricter financial discipline in future budgets.
 
"We had a choice: did we want to sign a new treaty, with huge amounts of extra complexity and bureaucracy and all the rest of it, that would go into our existing treaty, did we want to do that without proper safeguards for Britain. If I couldn't' get those safeguards, I said I wouldn't sign that treaty, I didn't, so I didn't."

In the end an agreement was reached that included only the 17 EU member nations that use the Euro as their currency.

Experts and politicians are now saying it could be years before the European Union fully recovers and the former IMF chief Dominique Strauss-Kahn has called on China to continue support into the future.

"China is one of the big players. So it can't play without having a glance at what is going on for the global economy. Not only for moral reasons, it's in the interest of China itself that the global economy works well."

After a year of crisis meetings and resignations it appears the EU will survive but that it will be long road to recovery.
And while no one is certain what 2012 will bring for the financial zone, one thing is for sure.

Silvio Bersusconi the man famed for his cosmetic surgery and fake tan will always be remembered as the flamboyant Italian Prime Minister who left his country with an insurmountable debt and almost brought the European Union to its knees.

For CRI, I'm Emily Hennessy.