End of an era: Berlusconi to go after crucial vote falls short
Markets force Italian prime minister out
Published 09/11/2011 | 05:00
Italian Prime Minister Silvio Berlusconi finally threw in the towel last night ending a tumultuous two-decade political career beset by scandal and economic stagnation.
In the end Mr Berlusconi's controversial private life didn't trigger his resignation, with the financial markets instead forcing him out, as Italy's borrowing costs neared the dangerous level of 7pc.
The latest and most damaging humiliation in parliament, coupled with calls by an important political ally for him to quit, proved too much yesterday for the 75-year-old media tycoon.
A furious Mr Berlusconi spoke bitterly last night of "betrayal" as he stormed out of parliament, and appeared reluctant to stand down. Eight MPs who refused to support him were labelled traitors in a scribbled note captured on camera.
Markets breathed a sigh of relief at his planned exit -- with shares rising, the euro strengthening and financial stocks rallying. Mr Berlusconi's exit coincided with signs that Greece is also on the way to getting a new unity government.
The Italian head of state, President Giorgio Napolitano, announced that Mr Berlusconi would go after he had adopted key economic reforms demanded by the EU.
"Once this commitment has been carried out, the prime minister will submit his resignation," said the statement from the president's office, which came after a 45-minute meeting between Mr Berlusconi and Mr Napolitano. No clear timescale was given.
In a statement an hour later, Mr Berlusconi confirmed his departure: "It appears the government no longer has a clear majority. Therefore, we have to take stock of what is happening in Italy and what is going on in the markets."
He said it was for Mr Napolitano to decide if he wanted to form a stop-gap government after the reforms had been passed, but added he saw "only the possibility of new elections".
The news seemed inevitable after it became clear that Mr Berlusconi had no hope of carrying through vital economic measures demanded by Europe and the markets following a financial house-keeping vote in the parliament in which he finished eight short of the absolute majority of 316.
The opposition deliberately abstained to ensure the vital vote on last year's budget passed, while simultaneously exposing Mr Berlusconi's inability to garner a majority. Business leaders and opposition figures had warned that, by stringing out his departure, Mr Berlusconi was worsening the already critical financial situation.
Mr Berlusconi's reluctance to quit was fuelled by pride -- but not only that. Observers noted that one of the longest meetings he held in the past 48 hours has been with his oldest children, Marina and Piersilvio, key lieutenants in his business empire, and Fedele Confalonieri, chairman of his Mediaset TV company.
As the political drama unfolded in Italy a team of European officials left Brussels for Rome last night, to begin monitoring the Italian government's finances.
Italy agreed to the mission at last week's meeting of the leaders of the G20 group of countries in Cannes. The work of the mission starts today. In Brussels European Economy Commissioner Olli Rehn said he was "concerned" about rising borrowing costs for Italy.
He said restoring confidence in Italy is essential to easing bond market worries.
The commissioner said he had posted a questionnaire with 40 detailed questions to the Italian authorities.
"I expect an answer soon," he said.