Bizwatch

Berlusconi Adjusts His Set
Last week the government of Italy’s Prime Minister, Silvio Berlusconi, was in crisis. His center-right coalition, shaken by overwhelming losses in regional elections earlier this month and bitter debate over the leader’s tax and economic policies, began to disintegrate: one Deputy Prime Minister, Marco Follini, resigned and withdrew his ministers from the Cabinet, raising the possibility of early elections. But financially, Berlusconi the media tycoon had a great week: his family’s holding company announced the sale of 197 million shares in the Mediaset group — which owns all three of Italy’s major private television networks — for over €2.1 billion. Some of Berlusconi’s coalition partners suggested that the sale, which reduced the Prime Minister’s share in Mediaset to 34.3% from 50.9%, should mute long-standing accusations that his combination of media and political power constitutes a conflict of interest.

Opposition leaders, including former Prime Minister Romano Prodi, were quick to note that the media group remained under Berlusconi’s control. (The Berlusconi family retains majority voting rights in Mediaset, even with a minority ownership share, a common arrangement in family-dominated media companies.) The move may have been largely business-motivated; Fabrizio Perretti, a professor at Bocconi University, claims that Berlusconi timed the sale to capitalize on the recent record-high of Mediaset’s share price, and to diversify his assets as traditional broadcasting braces for competition from new technologies such as digital terrestrial television. Not that this rules out political calculation. The regulatory environment would become much less favorable to Mediaset under a center-left government, Perretti observes. Other analysts have noted that the tax conditions that made last week’s transaction so lucrative might not outlast Berlusconi’s time in office. All of which makes more sense than the notion that any political worries about conflicts suddenly made Berlusconi decide to sell. Says pollster Renato Mannheimer: “Conflict of interest is something that matters only to that part of the Italian public that supports the opposition anyway. Those who vote for Berlusconi are entirely indifferent to it.”

Trying To Generate Interest
Paying clients interest on checking accounts may be old hat in places like the U.S., Britain and Spain. But when France’s mutual group Caisse d’Epargne announced last week it would begin doing so, it was heralded as revolutionary. Caisse d’Epargne’s promise to pay 0.5% to 1% interest on its roughly 4.5 million current accounts make it the first major bank in France to exploit last month’s regulation changes quashing 70-year-old laws banning certain charges and payments. So far banks Société Générale, BNP Paribas and Crédit Agricole all say they will not follow suit until customers express interest of their own. It may be a long wait. Though the French wrote 4 billion checks on 57 million current accounts last year, the national average balance of €1,500 would yield a mere €7.50 interest annually under Caisse d’Epargne’s scheme — before tax and service charges. Not much of a revolution after all. — By Bruce Crumley