Although Berlusconi got his coat and left the building last night – he in fact literally “slipped out of a side door” – we should remind ourselves thathe is not quite gone from Italian politics yet. His Popolo della Libertà party is still the largest in the Italian Parliament, and no new government will survive without its support, which Berlusconi has said will be “conditional“. That presumably means that PdL will stand behind the new government until a successor to Berlusconi has been found and installed, at which point we should expect new elections. That will probably take a few months.
For the moment, though, the focus is on the formation of the new government, which should ideally be in place by Monday morning, so that the financial markets can wake up to an unambiguous political situation (they scare so easily, the poor dears). As former EU commissioner Mario Monti seems like both the best and most likely candidate, his appointment should be more or less a formality, but he will be in for a though time once in office. Although Monti has a number of factors on his side (not least that of not being Berlusconi), the necessary reforms will still be hugely unpopular, and while the initial reform package passed Parliament this weekend with vitually unprecedented speed and easy, only time will tell whether this Italian ‘Era of Good Feelings‘ will last once the anti-austerity demonstrations start appearing in Rome as they have in Athens, Madrid, Brussels and so many other cities.