Berlusconi to Face Confidence Vote After Passage of Budget Law Next Month
By - Nov 17, 2010 1:44 AM GMT+0530
Italian Prime Minister Silvio Berlusconi will face a vote of no-confidence in parliament that may topple his government as soon as the legislature passes his 2011 budget plan next month.
As soon as the budget is passed, “the political crisis will be examined, which will culminate with a no-confidence vote in the government,” President Giorgio Napolitano said in a statementposted on his website after meeting in Rome with the heads of the two houses of parliament.
The budget plan will be passed within the first 10 days of December, allowing for a confidence vote in both houses of Parliament on Dec. 14, news agency Ansa reported after the meeting without saying where it got the information. Berlusconi will defend his government in a debate on Dec. 13, Ansa said.
Berlusconi’s grip on power has been slipping since Gianfranco Fini, co-founder of the ruling People of Liberty party, broke with the premier in July. Fini this month demanded that Berlusconi resign, and may have enough backers for his new Future and Liberty for Italy party in the Chamber of Deputies to deny Berlusconi a majority and bring down the government.
Napolitano announced the confidence vote after discussing the crisis with Fini, who is also speaker of the Chamber of Deputies, and Renato Schifani, his Senate counterpart. The meeting was held after four members of Fini’s party, including a Cabinet minister, quit the Berlusconi government yesterday to speed the collapse of the government.
Budget Cuts
The Chamber of Deputies today began discussing the 2011 budget plan, which includes cuts totaling 13 billion euros ($18 billion) to trim the deficit. It was approved on Nov. 13 by the lower house’s budget committee and will also require passage in the Senate.
The yield premium investors demand to hold Italian 10-year bonds over similar-maturity German bonds rose to a euro-era record of 180.9 basis points on Nov. 11 as concern that Ireland and Portugal may follow Greece in seeking a bailout hurt bonds of other so-called peripheral countries. The spread rose 2.8 basis point today to 150.7, while Italy’s benchmark FTSE MIBIndex was down 2.1 percent to 20,563 p.m.
Mediaset SpA, the broadcaster controlled by Berlusconi, tumbled 4.6 percent today to 4.59 euros, taking its five-day loss to more than 15 percent. Mediaset posted a bigger-than- expected third-quarter net loss on Nov. 10 of 49 million euros.
While Berlusconi, 74, may have enough backing in the Senate, Fini may have sufficient support in the lower house to deny him a majority. The outcome became less certain today afterGiuseppe Angeli, a deputy who had joined Fini’s ranks, announced he planned to return to the Berlusconi fold. Defense Minister Ignazio La Russa said he had received calls from other Fini backers seeking to return to Berlusconi’s forces.
Fini Truce
Fini, who abandoned Berlusconi’s party after accusing the premier of not permitting any debate within the government, reached a truce with Berlusconi when he backed the premier in a confidence vote on Sept. 29. The reconciliation began to fray after media reports that the premier helped secure the release from police custody of a 17-year-old nightclub dancer. Berlusconi, whose term ends in 2013, has acknowledged he helped the girl, who had attended a party at his Milan villa.
In a Nov. 7 speech, Fini called for Berlusconi to quit.
The collapse of Berlusconi’s government won’t necessarily lead to early elections or his exit from Italian politics. Before calling for a vote, Napolitano would first consult all the political parties to see if a new government could be formed, including one led by Berlusconi. Even with his popularity at record low levels, polls indicate that his coalition might still win re-election.
The confidence votes may coincide with a decision by Italy’s Constitutional Court set for Dec. 14 on the validity of a law passed by the government granting Berlusconi and other top officials immunity from prosecution while in office. Should the court rule against the premier, pending corruption trials against him could resume. (bloomberg)
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