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Silvio Berlusconi's conviction leaves Italy's government weaker, but not broken. The media mogul-cum-politician lost his final appeal on his conviction for tax fraud, which will exacerbate tensions within Rome's ruling coalition of the centre left and right. Yet neither party wants to face their electorate for now. That means a crisis isn't imminent – but the prospect of a political consensus that would allow serious reform is now more remote.
The verdict handed down by Italy's Corte di Cassazione is a watershed moment for Mr. Berlusconi and his country. The leader of the centre-right People of Freedom party has even more brushes with justice ahead. For the moment his four-year nominal jail sentence may result in just one year of house arrest. A potential ban from public office has been handed back to a Milanese court for review. Beyond that, the 76-year-old tycoon will have to face separate charges, for paying for sex and abuse of office.
The verdict signals the start of Mr. Berlusconi's long-overdue exit from politics. So it could have the welcome consequence of triggering a shakeout of both left and right. But for now neither party will dare pull the plug from under the coalition. Mr. Berlusconi will want to wait and see whether he is banned from public office. And he fears that withdrawing his party's support for the government could force the left to form an alliance with the Five Star Movement, which is intent on reining in his business empire.
Where does that leave Prime Minister Enrico Letta's reform agenda? The government, formed weeks after an inconclusive election in February, is likely to limp on, living from day to day, divided and distracted by a possible future election. It hasn't been idle in his first four months, passing laws to improve civil justice or repay the state arrears that were hurting businesses. It is talking about a change in the electoral law. But the unpopular measures Italy needs to shake off its sluggish growth, such as reforming the public sector, or tax and labour reform, look even more distant.