Profiting from Italian Prime Minister Silvio Berlusconi's Latest Sex Scandal

For once in his life Italian Prime Minister Silvio Berlusconi may have been the victim of a crime as opposed to being the perpetrator of one. Italian police have arrested Giampaolo Tarantini, an Italian businessman who is accused of extorting more than 500,000 Euros from Berlusconi. Tarantini already admitted in the past that he paid prostitutes to entertain at lavish parties held at the official residence of Prime Minister Silvio Berlusconi but he had always maintained that the Prime Minister was unaware that the women were being paid for their affections. It is alleged that Berlusconi paid an initial 500,000 Euros to Tarantini, as well as unspecified monthly payments, in order for Tarantini to lie to investigators by telling them that Berlusconi was unaware that the women were being paid to have sex with him. The payments were also said to be made so that Tarantini would agree to a plea bargain in an earlier another trial, in order to prevent embarrassing information regarding Berlusconi from being aired in court. Italian Prime Minister Silvio Berlusconi is no stranger to scandals and doesn't deny that he paid Tarantini but Berlusconi claims that he was only helping out a friend in need. The latest scandal comes at a bad time for the Italian Prime Minister, who already faces several charges of corruption and is also on trial over allegations that he paid an underage girl for sex at one of his now infamous parties. Although most European heads of state would resign if they were accused of half the things that the Italian Prime Minister has been accused of, Berlusconi has learned that the best way to stay out of jail is to stay in government. It's still unknown whether or not this will affect Berlusconi's ability to carry out reforms aimed at improving Italy's finances but the country could certainly do without the distraction of yet another Berlusconi related trial. If Berlusconi's latest scandal and his ongoing legal woes embolden the Italian opposition, Italy's tax and spending reforms could either be delayed, watered down or altogether derailed. If any of these were to occur, it would put pressure on the euro, which would benefit investors in the ProShares UltraShort Euro

ETF and the Market Vectors Double Short Euro ETN

. There's also the possibility that Berlusconi will finally be forced to resign. While the resignation of a Prime Minister is usually seen as a negative for the country involved, it wouldn't be surprising if the market looked favorably upon a Berlusconi resignation or conviction. Silvio Berlusconi has been an embarrassment to Italy for quite some time and his departure could be a sign that Italy is finally taking the fight against corruption at the highest levels of government seriously. If that were the case, then the iShares MSCI Italy Index Fund

ETF could see its share price get a boost if Italy finally gives Berlusconi the boot.