Berlusconi faces crunch parliament vote

The prime minister was quoted as saying after a meeting of party leaders on Monday night that he would decide whether to resign after a key parliamentary vote on Tuesday afternoon on ratifying the 2010 accounts.

Pressure mounted on Mr Berlusconi in the early afternoon when Umberto Bossi, leader of the Northern League – junior partner in the ruling coalition – told reporters his party was asking Mr Berlusconi to step aside.

Asked whether the prime minister should be replaced by Angelino Alfano, secretary of Mr Berlusconi’s People of Liberty party, he was quoted as replying: “Who else would we put? The leader of the PD [opposition Democrats]?”

Mr Bossi previously insisted that his party wanted early elections if the government were to fall. It was not immediately clear if the Northern League’s latest stance was a ploy to persuade wavering MPs to vote with the coalition later on Tuesday, or its final position.

Meanwhile, opposition parties are expected to measure their strength in the lower house by abstaining as defeat of the motion would lead to a freezing of government spending and an institutional crisis. If opposition leaders believe they have the numbers to unseat the government then a motion of no confidence is expected later in the week.

Even if the Northern League does support Mr Berlusconi, defections by several MPs from Mr Berlusconi’s People of Liberty party make it unlikely that the centre-right coalition will achieve an absolute majority in the 630-member lower house. The 75-year-old billionaire prime minister is piling pressure on would-be rebels in his party, declaring he wants to “look in the face” of those intending to “betray” him. He is expected to meet a handful of the rebels on Tuesday.

Mr Berlusconi’s threat to force Italy into snap elections – and possibly a heavy defeat for the ruling coalition – is likely to concentrate the minds of would-be defectors who might have no political future without their long-time protector.

Yields on Italian 10-year bonds hit a high of 6.74 per cent on Tuesday morning before easing slightly, after further intervention by the European Central Bank. The spread with German Bunds widened to a euro-era high of 496 basis points before narrowing to 486bp. The Treasury is due to try to sell €5bn of 12-month notes on Thursday.

In contrast the Milan stock market was trading up more than 2 per cent, reflecting the view that Mr Berlusconi’s days are numbered.

Should Mr Berlusconi present his resignation on Tuesday evening then Giorgio Napolitano, head of state, will hold consultations with political leaders to see if an alternative government can put together a majority in parliament.

Πηγή: Financial Times