Business World

Thursday 14 December 2017

Berlusconi clings on as party rebels plot downfall

Supporters desert coalition as Italian bonds soar

Italian Prime Minister Silvio Berlusconi at
the G20 summit in Cannes yesterday
Italian Prime Minister Silvio Berlusconi at the G20 summit in Cannes yesterday
Greek communists protesting in Athens
President Barack Obama with French President Nicolas Sarkozy in Cannes

Barry Moody

ITALIAN Prime Minister Silvio Berlusconi refused to step down yesterday despite a party rebellion that has brought his centre-right coalition to the brink of collapse in the face of a growing economic crisis.

Mr Berlusconi is widely believed to have already lost the numbers he needs to survive in parliament but he told reporters at the G20 summit in France: "We have a majority which I continue to believe is solid and so we will continue to govern."

The 75-year-old media magnate described party rebels as traitors to the country but said they would return to the fold once he spoke to them, despite the economic crisis that has fuelled an open revolt in his ruling PDL party.

Underlining the foreboding atmosphere, yields on 10-year Italian bonds hit a euro lifetime high of 6.43pc at one point yesterday, close to levels that led to bailouts for Ireland and Portugal.

Italy's president, Giorgio Napolitano, issued the latest in a series of alarmed calls for political consensus to pass painful economic reforms, saying the country was suffering a grave crisis of international confidence. Mr Berlusconi, caught in the crossfire from European powers and the party revolt at home, agreed at the summit to IMF monitoring of economic reforms which he has long promised but failed to implement. He said he had turned down an offer of IMF funding for Italy.

All this may soon be irrelevant to the prime minister, who returned home last night to face what looks increasingly like a deadly rebellion by his own supporters. The strains in his government were on display in Cannes where his finance minister, Giulio Tremonti -- with whom he has long had frigid relations -- refused to directly answer a question on whether he agreed Mr Berlusconi could continue.

With financial markets in turmoil over Greece, and Italy viewed as the next domino to fall in the eurozone crisis, calls are mounting for a new government to carry through reforms convincing enough to regain international confidence.

Mr Berlusconi says the only alternative to him is an early election next spring, rather than the technocrat or national unity government urged by many politicians and commentators.

Two deputies from Mr Berlusconi's PDL party this week defected to the centrist UDC, taking his support in the 630-seat lower house of parliament to a likely 315 compared with the 316 he needed to win a confidence vote last month.

But at least seven other former loyalists have called for a new government and could vote against him.

"The (ruling) majority seems to be dissolving like a snowman in spring," said respected commentator Stefano Folli in the financial daily 'Il Sole 24 Ore'. Other commentators spoke of an "inexorable" revolt against Mr Berlusconi.

Even Defence Ministry undersecretary Guido Crosetto, a Berlusconi loyalist, said on television: "I don't know how many days or weeks the government has left. Certainly a majority relying on a few votes cannot continue for long."

Mr Berlusconi, one of Italy's richest men, still has significant powers of patronage and he and his closest aides are expected to spend the weekend trying to win back support for a parliamentary showdown on Tuesday.

Irish Independent

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