Berlusconi 'makes secret pact to step down' under pressure from EU
SILVIO Berlusconi has reportedly drawn up a "secret pact" under which he will resign in December or January, paving the way for Italy to elect a new government in March.
The embattled prime minister made the deal with his key coalition ally, Umberto Bossi of the devolutionist Northern League, in return for Mr Bossi's support for pension reforms, according to unconfirmed reports in two Italian newspapers – La Repubblica and La Stampa.
Italy is under huge pressure from the European Union to reform its pensions system and extend retirement ages as part of a plan to rein in its enormous public debt and revive its moribund economy.
Mr Berlusconi reached agreement on Tuesday night with Mr Bossi and will present a pension reform plan to the EU at a crucial meeting in Brussels today.
"Don't make a fool of me in Brussels, and I promise that we'll go to elections in March," Mr Berlusconi told the Northern League leader, according to La Repubblica.
Mr Berlusconi's government has been in a state of almost permanent crisis since it was re-elected in 2008, with the 74-year-old prime minister assailed by sex scandals, corruption allegations and deep rifts in his shaky coalition.
But he has always batted away demands for his resignation and has repeatedly insisted that he will continue governing Italy until the end of his five year term in 2013.
Reports that his resolve may be crumbling, whilst not confirmed, will only add to the febrile political atmosphere as Italy struggles to convince the euro zone that it is up to the task of shoring up its economy and tackling its debt.
Mr Berlusconi has spent an intense two days hammering out a "letter of intent" to the EU on what Italy will do to reform the stagnant economy. Its public debt of 1.8 trillion euros is equal to nearly 120 per cent of GDP.
Mr Bossi said on Tuesday night that the coalition had reached agreement on reforms but that it was up to the EU to decide if they were enough. "In the end we have found a way. Now we will see what the EU says."
But he expressed doubt over whether the government would survive until 2013.
The reports of a secret pact between Mr Berlusconi and Mr Bossi were denied by the prime minister's office and the Northern League on Wednesday.