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Italian PM refuses to back down, despite possible no-confidence vote

7 Nov

The future of Italian Prime Minister Silvio Berlusconi’s government looks increasingly shaky, as thousands of angry protestors took to the streets of Rome, demanding his resignation. They want a new leader who will lead them out of economic crisis, in order to lower the debt of the euro-zones third largest economy.

This is amidst market fears that Italy may be next in line to need a bailout from its European partners. If this were to happen, it would be more serious than the crisis in Greece due to its size.

With the combination of a parliamentary majority constantly in doubt, as well as rising international criticism, the Wall Street Journal state Mr. Berlusconi no longer has the ability to make serious policy moves.

Furthermore, Berlusconi may also face a no-confidence vote, which he could lose if potential defectors stick to their guns. A scheduled ballot on Tuesday will reveal the votes of once faithful members who have threatened to vote against the government.

Despite this, he refuses to stand down. He said in a statement on Saturday, “I am sorry to disappoint, but responsibility in the face of voters and the country requires… our government to continue this battle”.

Sovereign-debt consultant Nicholas Spiro said, “Mr Berlusconi may still be in office, but he has not been in power for some time”.

When a government loses its parliamentary majority in Italy, the solution is either the formation of a shuffled administration, the formation of an interim so-called technical government charged with finishing urgent business, or new elections.

If early elections are called, it is unclear who will step up to challenge the premier. The left-wing opposition is in disarray, and a group of centrist forces also opposed to Mr. Berlusconi have a number of leaders who draw from disparate constituencies, ranging from pro-Vatican forces to secularist ones.

If a technical government is forged, many lawmakers have said former EU competition commissioner Mario Monti could be tapped to take the helm.

There have been several meetings between Democratic Party leader Pier Luigi Bersani and President Giorgio Napolitano, Italy’s head of state, to discuss the state of Italy’s economy. Mr Napolitano has the power to dissolve Parliament if Mr. Berlusconi no longer has a strong enough majority to govern.

Worrying times, as the Wall Street Journal said it is possible his parliamentary majority could fall apart as early as next week.

So what would Mr. Berlusconi have to do to turn things around and get the people back on his side? European leaders at the G-20 summit in Cannes asserted he must stick to commitments, including the loosening of Italy’s strict labor code, lightening the state’s pension load, and privatizing state assets. The Wall Street Journal reports how according to people familiar with the matter, officials from the International Monetary Fund are expected to arrive in Rome as early as Monday to ensure Italy is sticking to its pledge. Yet the European leaders have not been convinced by Mr. Berlusconi’s promises of an overhaul.

The Italian PM has faced many scrapes during his 18 years in politics, but will this be the final nail in the coffin? The Wall Street Journal said he may well survive what is shaping up to be the most dangerous upheaval in his ranks since his latest term began in 2008.