Attacks on Italian Prime Minister Silvio Berlusconi in the British press have hit an especially raw nerve as he hosts this year’s G8 summit and some Italian newspapers have had enough.

The summit has come at a particularly sensitive time for the beleaguered Italian leader, who has been dogged for weeks by salacious scandals involving allegations he has a soft spot for underage women and has entertained escort girls.

Britain’s irreverent media have had a field day, delving into his exotic personal life and publishing lurid cartoons of the veteran Berlusconi cavorting with naked women.

Adding insult to injury, the British press have also led the charge in accusing Berlusconi of chaotic organisation of the annual G8 knees-up, with a fanciful story in the Guardian suggesting Italy might be ejected from the rich nations club.

In an image-conscious country where looking bad is a unpardonable sin, that was the final straw for some Italians and a counter-offensive is underway.
   
Unsurprisingly, Il Giornale newspaper, owned by Berlusconi’s family, has led the charge.

“The attack on Italy? These English are still racist,” the paper wrote on its front page on Friday, taking umbrage at a cartoon showing a grinning Berlusconi holding up a bra.

But other papers have also decided to put their foot down.

Rome’s Il Messaggero daily, taking aim at the “spoilt Anglo-Saxons”, dedicated a whole page on Friday to criticism of the British economy.

“One must say, once and for all, that on the real economy you can’t give lessons to anyone, least of all Italy,” it wrote.

Italy’s television, which has paid little attention to the Berlusconi scandals, has meanwhile presented the l’Aquila summit as an international triumph of heroic proportions.

Italian diplomats have also been drafted to the cause, with embassies abroad phoning up major media companies to pass on praise from U.S. President Barack Obama for the meeting.

Certainly Berlusconi has defied his critics in putting on a smooth, sleek show amidst the rubble of the April earthquake.

But while the Italian style is, as ever, impressive, the substance is perhaps less striking.

Unlike previous G8 hosts, Berlusconi seems to have focused his attention more on logistics than the issues, leaving other leaders to take charge of the toughest dossiers.

Obama chaired the crucial global warming talks, French President Nicolas Sarkozy led discussion on Iran and when it came to discussion on Africa, Italy was in the embarrassing position of being the meanest aid provider at the table.

But don’t expect to see such diplomatic details to get prominence in the Italian press!

And while many analysts have questioned the outcome of the talks, suggesting for example that the climate accord fell far short of what was needed, the Italian press is once again accentuating the positive and eliminating the negative.

And of course, it is all thanks to Italy. “Tired but satisfied, Berlusconi showed once again how he can achieve the best results in these occasions,” Il Messaggero said.

Photo: POOL New/Reuters

Pope Benedict issued an ambitious call to reform the way the world works on Tuesday shortly before its most powerful leaders meet at the G8 summit in Italy. His latest encyclical, entitled "Charity in Truth," presents a long list of steps he thinks are needed to overcome the financial crisis and shift economic activity from the profit motive to a goal of solidarity of all people.

Following are some of his proposals. The italics are from the original text. Do you think they are realistic food for thought or idealistic notions with no hope of being put into practice?

• "There is urgent need of a true world political authority. .. to manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration... such an authority would need to be universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights."
• The economy needs ethics in order to function correctly - not any ethics whatsoever, but an ethics which is people-centred..."
• "Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers. Right intention, transparency, and the search for positive results are mutually compatible and must never be detached from one another."
• "Without doubt, one of the greatest risks for businesses is that they are almost exclusively answerable to their investors, thereby limiting their social value... there is nevertheless a growing conviction that business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference... What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise, its benefit to the real economy and attention to the advancement, in suitable and appropriate ways, of further economic initiatives in countries in need of development."
• "One possible approach to development aid would be to apply effectively what is known as fiscal subsidiarity, allowing citizens to decide how to allocate a portion of the taxes they pay to the State."

(Photo: Pope Bendict, 1 July 2009/Tony Gentile)

Follow FaithWorld on Twitter at RTRFaithWorld

Has German Finance Minister Peer Steinbrueck finally said what many world leaders think but are afraid to say? That the British government won’t sign up to meaningful reform of financial markets because it is too worried about what it would mean for the country’s most famous cash cow, the City of London.

The City, which accounts for around 35 percent of global foreign exchange turnover, has been a popular target for critics of capitalism for years. But it has rarely been singled out so bluntly as a problem by one of Britain’s close allies.

Even for a man not known for holding his tongue, Steinbrueck’s remark on Wednesday that Downing Street was impeding reform because it had “practically aligned” its interests with the City, was unusually undiplomatic. Just days before global leaders meet at a Group of Eight summit in Italy, Steinbrueck suggested the British government was plotting a “restoration” of the pre-crisis order to protect its own interests. The United States, by contrast, was now open to reform, he said.

Rather than attempting to smooth ruffled feathers when she addressed parliament on Thursday, Chancellor Angela Merkel picked up the thread, saying she would not tolerate efforts to stall reform at the G8 summit, though she did not name Britain.

Steinbrueck’s comments generated a strong response on German websites. Though he belongs to the centre-left Social Democrats, many readers of conservative daily Die Welt wrote in to praise him. “Finally the truth”, “genius” and “backbone” were some of the remarks his stance provoked. Across the channel, the most popular reader’s comment posted online in an article by Eurosceptic British newspaper the Daily Mail also backed the 62-year-old. “I’m with the German finance minister,” it begins.

Whether one agrees with his approach or not, Steinbrueck knows he is not talking into a vacuum. Large swathes of the commentariat believe not enough has been done to stabilise financial markets over the long term. Martin Wolf, chief economics commentator of the Financial Times, wrote on Wednesday that without radical changes, another banking crisis is inevitable.

PHOTO: German Finance Minister Peer Steinbrueck addresses a news conference in Berlin, May 13, 2009. Steinbrueck said on Wednesday Germany’s interbank lending sector was still suffering from weak confidence. REUTERS/Fabrizio Bensch

- Luke Baker is a political and general news correspondent at Reuters. -

The mountains and deserts of southern Afghanistan are far removed from the elegant charms of Trieste in northern Italy, but there will be a link between the two this weekend.

Foreign ministers from the Group of Eight nations meet in the Italian city on the Adriatic on Thursday for three days of talks, with the state of play in Afghanistan, as well as developments in Iran and the Middle East, front and centre of their agenda.

Nearly eight years and tens of billions of dollars on from the U.S.-led invasion that overthrew the Taliban, the United States and its allies appear no closer to bringing long-term stability to the country, with the Taliban resurgent throughout the south and west and the instability expanding across the border into Pakistan.

One of the major areas of unrest is Helmand, a vast desert and mountain province in the far south where around 8,000 British troops have been deployed for 3-1/2 years and 10,000 U.S. Marines are steadily being sent in as reinforcements.

While 18,000 troops backed by helicopters, jets, Predator drones, armoured vehicles and endless advanced weaponry may sound like more than enough of a match for bands of bearded militants who usually aren't armed with much more than a Kalashnikov rifle, it's not always the case.

Helmand, split down the middle by the Helmand river, is larger than Switzerland and has a daunting mix of terrain that the Taliban and their followers are far more familiar with than foreign troops sweating in heavy, cumbersome combat gear. And it's not just the challenges of the topography, it's the sheer size of the area that stretches any army's capability.

When I was in Helmand late last year, British troops at a Forward Operating Base in the far north of the province told me that they didn't have enough troops or back-up to venture any further than three kilometres from their small fortified camp to take on the enemy.

"The Taliban know it. If we attack them, they go just over three kilometres away and we have to come back to base," an officer at the remote outpost told me.

The absurdity of that situation partly explains why Britain and the United States have acknowledged that Helmand is currently in a "stalemate", a position they hope will be broken with a new strategy and the increase in troops in the coming months.

But the deadlock in fighting and the need for more manpower-- there are 90,000 foreign troops in Afghanistan, 50 percent less than in now relatively more stable  Iraq -- is not the only concern on the agenda for the G8 foreign ministers.

As well as trying to agree amongst themselves how they can best support the U.S.- and NATO-driven effort, they need to assess the implications of non-cooperation from Iran, on Afghanistan's western border, and the widening instability in the Pakistan tribal areas on Afghanistan's eastern border. Iran was due to send a delegation to the G8 meeting, but in the wake of international condemnation of the fallout from its disputed presidential election, it has cancelled its participation.

Afghanistan's election in August, when President Hamid Karzai will seek reelection despite broad unpopularity in the country and among some of his Western backers, will also be a focus of discussion. Karzai's high-profile makes him stand out among the 41candidates registered for the Aug. 20 poll. That greater degree of visibility is likely to secure him enough votes for reelection, according to some opinion polls, even if many Afghans express frustration at the scare progress made during his past 5 years in power.

Politically, socially and militarily, Afghanistan remains hugely in flux nearly eight years on from the Taliban's overthrow. While army commanders admit there can be no military solution to the conflict, diplomats and development experts are struggling to find a political way forward either.

Three days of talks among eight foreign ministers in Trieste is unlikely to go very far in resolving what is becoming an ever more intractable conflict 5,000 kilometres away.

The global financial crisis has produced broad agreement that the world needs a new financial architecture, but world leaders are a long way from reaching agreement on what shape it should take.

Many countries have rescue plans to support banks and unfreeze credit markets. The United States has set in motion reforms to change the relationship between Washington and Wall Street.

But calls are being made for much deeper, coordinated reforms, and a series of global summits is planned to discuss how to reform the financial system. The first of these meetings will be held on Nov. 15 in the United States.

Capitalism as we used to know it may be on its deathbed. Some world leaders have called for a revamp of the 1944 Bretton Woods conference that resulted in the post-World War Two financial order and created the IMF and the World Bank. 

Economists and commentators have been filling newspapers with suggestions about what should be included in the new financial architecture, from more regulation to concerns about climate change and trade.

Some experts say world leaders risk making terrible mistakes of they get it wrong and must stand back and properly assess what went wrong before enacting wholesale reforms. Others say it would be wrong to force one country or region’s vision on another.

There is little doubt we are now, as British Prime Minister Gordon Brown put it, at a “defining moment” for the world economy. But there are more questions than answers.

Can world leaders overcome their differences and live up to the task? Will they have any concrete proposals to discuss on Nov. 15? Will it be more than a big talking shop?

As financial and philanthropist George Soros says, what kind of system will evolve from this is a very open question. 

German Chancellor Angela Merkel sent a clear “I told you so!” to the United States and Britain at the weekend, criticising them in unusually frank terms for resisting measures that might have contained the current financial crisis. The conservative leader of Europe’s largest economy reminded her partners that she had pushed for steps to boost the transparency of hedge funds during Germany’s presidency of the Group of Eight last year. ”We got things moving, but we didn’t get enough support, especially in the United States and Britain,” she told the Muenchner Merkur newspaper. Merkel expanded on her point in a speech in Austria, suggesting that both Washington and London were only now coming around to her view.

“It was said for a long time ‘Let the markets take care of themselves’ and that there is ‘no need for more transparency’…Today we are a step further because even America and Britain are saying ‘Yes, we need more transparency, we need better standards for the ratings agencies’.

Germany had made greater transparency a key theme of its rotating presidency of the G8, which includes the United States, Japan, Germany, Britain, France, Italy, Canada and Russia. Berlin had expressed fears that hedge funds could threaten the stability of the financial system through their heavy reliance on borrowing to finance risky trading strategies. But it ran into resistance from the United States and Britain, achieving little.

Whether Merkel’s G8 initiative could have averted or limited the current financial market crisis if it had been successful is certainly debatable. But reminding voters that she had sought to address the problem as early as last year could help Merkel score points on the domestic front ahead of a general election next year. Merkel’s Christian Democrats (CDU) rule in an uneasy grand coalition with the Social Democrats (SPD), and both sides have been trying to play up their own role as crisis manager in the current financial market turmoil.

Both Merkel and her SPD finance minister, Peer Steinbrueck, have tried to take credit for Germany’s efforts last year to agree better transparency rules for financial markets. SPD budget expert Carsten Schneider praised Steinbrueck’s efforts during Germany’s G8 presidency in a newspaper interview on Monday, adding: “At the time, the United States and Britain demonised every effort to agree more transparency and rules.”

As Germany’s election approaches, the “I told you so!” Berlin seemed to send to Washington and London on the weekend could turn into an “I told you so first!”-competition between Merkel’s CDU and her SPD rivals.