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Italy's Berlusconi drops bid to oust govt in political U-turn
World

Italy's Berlusconi drops bid to oust govt in political U-turn

2 min. 02.10.2013 From our online archive
Italy's Silvio Berlusconi on Wednesday abandoned his bid to topple the government, voting for a confidence vote in a humiliating climbdown after key allies rebelled against his leadership.

(AFP) Italy's Silvio Berlusconi on Wednesday abandoned his bid to topple the government, voting for a confidence vote in a humiliating climbdown after key allies rebelled against his leadership.

"We have decided to vote for confidence, not without internal disputes," Berlusconi said before the vote in parliament, which was called after he launched his challenge to the leadership on Saturday.

Berlusconi had threatened to call time on the government and pull his ministers from the cabinet.

On Wednesday, the former Italian PM said he had changed his mind after hearing Prime Minister Enrico Letta's promise to lower taxes and mindful of the need for reforms.

The move came after several members of Berlusconi's People of Freedom (PDL) party broke ranks with the billionaire media mogul, including his protegé and Interior Minister Angelino Alfano.

The surprise about-turn made victory for Letta's coalition a certainty and was immediately cheered by the markets, with shares in Milan jumping 1.45 percent higher after the shock announcement.

Analysts said that the results showed a decline in credibility and signalled the beginning of the end of Berlusconi's political life.

Berlusconi "crazy and irresponsible"

Letta had earlier asked lawmakers to vote for him, saying: "Italians are crying out that they cannot take any more blood in the arena, with politicians who slit each other's throats and then nothing changes."

"Italy runs a risk that could be a fatal risk. Seizing this moment or not depends on us, on a yes or a no," Letta added in his address to the Senate.

A letter doing the rounds in the Senate just before Berlusconi spoke had 23 signatures of PDL senators willing to defy their leader.

Together with votes from four rebels of the anti-establishment Five Star Movement, this would have been sufficient for Letta to win a majority even without Berlusconi's support.

It was not immediately clear whether the divisions inside the centre-right would be formalised with rebel lawmakers setting up their own political party or parliamentary grouping or whether differences with Berlusconi could be healed.

Political drama delays 2014 budget

Berlusconi had only on Tuesday rallied his supporters to vote against the government. "Despite the risks, I have decided to put an end to the Letta government," Berlusconi had said in a letter to the Catholic magazine Tempi.

Financial analyst Christian Schulz from Berenberg Bank said a Letta victory "would be a confidence boost for Italy and the eurozone."

"Italy would avoid the power vacuum ahead of new elections, could address the fiscal slippage and reassert confidence that the eurozone is on the mend," he said.

But analysts warn recession-hit Italy's fiscal policy targets are still at risk and the political drama could delay the 2014 budget.

The country is suffering the longest downturn since World War II and is struggling to meet a public deficit target of 2.9 percent for this year, below the EU-mandated 3.0 percent.

The jobless rate has also returned to a record high of 12.2 percent, with youth unemployment also at its highest ever level of 40.1 percent.