Giuseppe Orsi arrest highlights Italian politics' odd relationship with business

Finmeccanica chief arrested.

Giuseppe Orsi, the chairman of Italian giant defence and aerospace group Finmeccanica, was arrested on Tuesday on suspicion of corruption.

The investigation relates to the sale of 12 helicopters to the Indian government by AgustaWestland, the high tech helicopter unit of Finmeccanica back in 2010, at which time Orsi was at the division’s helm.

He now stands accused of bribing the Indian government to secure the sale. And he is not alone: the current managing director of AgustaWestland is under house arrest, an option not considered for Orsi, who judges said could potentially pervert the course of justice.

Unsurprisingly, Finmeccanica shares have tanked after initially being suspended, falling by more than 9 per cent to €4.236.

And this is merely the first layer of a complex story. According to the judge, bribery was “part of the firm’s philosophy” – hardly a compliment, but definitely less flattering considering the fact that the State is a 30 per cent shareholder in the business.

Finmeccanica has expressed solidarity with Mr Orsi, but Prime Minister Mario Monti declared, in his understated manner, that “there is a problem with respect to Finmeccanica governance that we will have to tackle”.

That’s certainly a good idea. But it is worth considering that it was Monti himself that appointed Mr Orsi as chairman at the end of 2011, following investigations into the practices of previous chairman Pier Francesco Guarguaglini and his wife, then head of another Finmeccanica subsidiary.

Orsi’s arrest comes just one day after the resignation of the Pope and it is possibly one of the few stories capable of pushing that news down to second place on Italian newspapers… Primarily because there is an election around the corner, and the German-born Vatican resident tends not to be active in local politics.

It’s election time, which has proven to be during the years intense and tiring time for the judiciary.

Investigations are still ongoing on Monte dei Paschi di Siena, the oldest bank in the world and the third largest in Italy by assets.

Not to be outdone, the head of State-owned energy company Eni Paolo Scaroni has received notice that he is under investigation for bribery.

And let’s not forget, that Italy’s technocrat saviour, and whose appointee is under arrest - Mario Monti - is running for office, as is the man most synonymous with Italian political intrigue - Silvio Berlusconi.

So, are we likely to see major changes and a clean up as a result of these elections? God knows! Or does he… It’s hard to tell now his spokesperson has thrown in the towel.

Giuseppe Orsi. Photograph: Getty Images

Sara Perria is the Assistant Editor for Banking and Payments, VRL Financial News

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The trouble with a second Brexit referendum

A new vote risks coming too soon for Remainers. But there is an alternative. 

In any given week, a senior political figure will call for a second Brexit referendum (the most recent being David Miliband). It's not hard to see why. EU withdrawal risks proving an act of political and economic self-harm and Leave's victory was narrow (52-48). Had Remain won by a similar margin, the Brexiteers would have immediately demanded a re-run. 

But the obstacles to another vote are significant. Though only 52 per cent backed Brexit, a far larger number (c. 65 per cent) believe the result should be respected. No major party currently supports a second referendum and time is short.

Even if Remainers succeed in securing a vote, it risks being lost. As Theresa May learned to her cost, electorates have a habit of punishing those who force them to polls. "It would simply be too risky," a senior Labour MP told me, citing one definition of insanity: doing the same thing and expecting a different result. Were a second referendum lost, any hope of blocking Brexit, or even softening it, would be ended. 

The vote, as some Remainers note, would also come at the wrong moment. By 2018/19, the UK will, at best, have finalised its divorce terms. A new trade agreement with the EU will take far longer to conclude. Thus, the Brexiteers would be free to paint a false picture of the UK's future relationship. "It would be another half-baked, ill-informed campaign," a Labour MP told me. 

For this reason, as I write in my column this week, an increasing number of Remainers are attracted to an alternative strategy. After a lengthy transition, they argue, voters should be offered a choice between a new EU trade deal and re-entry under Article 49 of the Lisbon Treaty. By the mid-2020s, Remainers calculate, the risks of Brexit will be clearer and the original referendum will be a distant memory. The proviso, they add, is that the EU would have to allow the UK re-entry on its existing membership terms (rather than ending its opt-outs from the euro and the border-free Schengen Area). 

Rather than publicly proposing this plan, MPs are wisely keeping their counsel. As they know, those who hope to overturn the Brexit result must first be seen to respect it. 

George Eaton is political editor of the New Statesman.