James Walston: Of all the holiday homes in all the world, he had to choose Silvio's

After the excitement and bustle of Athens and a brief stopover in Tuscany, Tony and Cherie Blair will deserve and no doubt enjoy their two days in the well-appointed secluded calm of Silvio Berlusconi's Villa Certosa on Sardinia's Costa Smeralda. It is, we are repeatedly reminded, a "private holiday" although Mr Berlusconi's press office is not averse to letting us know that the "real story" is that this is "a meeting of friends" with "no agenda, no dossiers and no protocol, counsellors and the like". But prime ministers' holidays are never "strictly personal" and in the case of Messrs Blair and Berlusconi there is a always a careful accounting of the profit and loss of even the most insignificant of actions, let alone a high-profile holiday encounter.

After the excitement and bustle of Athens and a brief stopover in Tuscany, Tony and Cherie Blair will deserve and no doubt enjoy their two days in the well-appointed secluded calm of Silvio Berlusconi's Villa Certosa on Sardinia's Costa Smeralda. It is, we are repeatedly reminded, a "private holiday" although Mr Berlusconi's press office is not averse to letting us know that the "real story" is that this is "a meeting of friends" with "no agenda, no dossiers and no protocol, counsellors and the like". But prime ministers' holidays are never "strictly personal" and in the case of Messrs Blair and Berlusconi there is a always a careful accounting of the profit and loss of even the most insignificant of actions, let alone a high-profile holiday encounter.

On the Italian side, the balance sheet shows a healthy profit; Mr Berlusconi earns legitimacy, respectability and influence in the international community. Within the European Union, the visit is a way of saying that there will be no Anglo-Franco-German directorate (or if there is, it will be Italo- as well). In Italy, the Blair visit gives Berlusconi prestige among his own supporters and is an opportunity to put one over the opposition: the Labour leader is with him and not cycling through the Apennines with Romano Prodi. On a personal level, the visit is most gratifying for Mr Berlusconi; he adores playing host at high-profile public functions and summits. Last year, Vladimir Putin dropped in accompanied by a Russian cruiser. There will be no Royal Navy tomorrow but Mr Berlusconi's pleasure will be as sweet.

Despite the lack of an official agenda, there are plenty of issues - migration from Africa, Iraq, next year's elections - that Mr Berlusconi would like to pursue, and they can compare notes on recent disappointing election results in a relaxed atmosphere, which could be productive. Much more difficult to understand is what is to be achieved by going to Villa Certosa - apart, that is, from the Rolex and jewels that Mr Berlusconi generally offers his guests. There will be excellent hospitality far from the madding Ferragosto crowds, and no doubt an entertaining evening with performances of his host's songs sung by Mr Berlusconi himself and his Neapolitan troubadour, Mario Apicella.

But at this critical moment in Mr Blair's prime ministership, he does need not to be seen schmoozing with Italy's equivocal leader; when they meet on formal occasions, they embrace and Mr Blair has risked getting pancake makeup on his suit. There will be no suits and no make-up on the beach but it will be more difficult to dryclean the stain on his judgement. Of course politicians have to meet other leaders, many much more sleazy than Mr Berlusconi, but we are told this visit is "a personal matter". Mr Blair has no obligation to accept Mr Berlusconi's hospitality unless there are pressing matters that transcend taste or they actually like hanging out together.

The British left has given up on Tony Blair long ago but even the most committed New Labour person finds Mr Berlusconi embarrassing; other European leaders have had Berlusconi bricks dropped on them - from making the sign of the horn behind the head of the Spanish Foreign Minister, to offering the Danish Prime Minister his wife, to calling a German MEP a kapo. Jacques Chirac's personal antipathy for Berlusconi is well known. When he held the EU presidency last year, Mr Berlusconi supported his friend Vladimir's policy in Chechnya and earned a ticking-off from the European Parliament. So European leaders will hardly admire Mr Blair's statecraft.

On more serious matters, the Italian Prime Minister is still on trial for having bribed a high court judge. The trial is unlikely to reach a verdict but in the meantime some of Mr Berlusconi's co-defendants have been convicted of corruption.

This is a man whose record three years in government have seen a rise in his own fortunes inversely proportional to the country's. New laws have reduced crimes, which Mr Berlusconi was accused of, to misdemeanours; judicial procedures that risked bringing his trial to verdict were made more complicated and are still dragging on; public broadcasting journalists who criticised him were not rehired; a media law has been passed that allows Mr Berlusconi's companies to expand into print and avoid the previous obligation to move one television channel on to digital.

Most recently, Mr Berlusconi solved his conflict of interest problem brilliantly by passing a law that excludes ownership of shares or property from any regulation. Mere ownership of three out of the country's seven national broadcasters cannot produce a conflict of interest, by law. In the meantime, Italy's economy has been stagnating; the promised tax cuts are still a mirage. Health and education reforms are rejected by employees in both sectors without even having produced a supposed Thatcherite "efficiency".

On that score, the Berlusconi government's right-wing bark is worse than its bite, with pension reform gingerly dealt with, too little, too late. The "tough" immigration law has caused endless delays and legal wrangles without stopping the flow, and the "free marketeers" are doing everything possible to save Alitalia from competition. Even the site of the meeting between the two leaders has its controversy, with Sardinian prosecutors and local authorities accusing Mr Berlusconi of building a new jetty, underground entrance and a 450-seat Greek theatre without planning permission.

Both politically and ethically, Mr Blair and Mr Berlusconi should not be spending their free time together. Their only common ground politically is that they have involved their countries in President George Bush's Iraq adventure without anyone understanding what they hope to achieve. Mr Berlusconi earned an invitation to Crawford, Texas but so far the reconstruction contracts are thin on the ground. Mr Blair would like to see some form of intervention in Darfur but neither man will be proposing a United Nations or Nato resolution on Sudan next week. Tomorrow's motto is much more likely to be "don't mention the war". For a prime minister who has just reappointed Peter Mandelson and confirmed John Scarlett as the new head of MI6, the two days with Mr Berlusconi are a sign either of utter self-confidence close to arrogance or that he is losing his grip on reality - or both.

James Walston is head of the Department of International Relations at the American University of Rome

John Rentoul is away