Italy's political circle faces showdown after passage of budget bill

09:02, December 09, 2010      

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The spending bill Italy passed late Tuesday cuts around 25-billion-euro government spending over the next two years, unofficially firing the starting gun ahead of the Dec. 14 confidence vote that will determine the future of the government led by embattled Italian Prime Minister Silvio Berlusconi.

Berlusconi's government has been on the ropes for more than a month, ever since former ally Gianfranco Fini, the leader of the lower house of the Italian parliament, called on the prime minister to step down.

But lawmakers elected to pass the budget plan before voting on the government's future, in order to avoid adding a fiscal crisis to Italy's protracted political crisis.

If Berlusconi fails to attract support among a majority of lawmakers in the 315-member Senate or the 630-member lower house, he will have to step down.

If that happens, the next step is not clear: Italian President Giorgio Napolitano could call for snap parliamentary elections, he could appoint a non-partisan technical government that would push through electrical and fiscal reforms ahead of new elections late in 2011, or he could ask Berlusconi or another figure to form a new government based on the current parliamentary breakdown.

In that scenario, centrist leaders Fini and Pier Ferdinando Casini, Berlusconi ally Gianni Letta, and current Finance Minister Giulio Tremonti have all been mentioned as possible figures who could form a new government if Berlusconi is pushed out of the picture.

Both Berlusconi's allies and critics have been scrambling for support ahead of the vote, and both say they have enough to tip the scales their way, though most non-partisan head counts predict Berlusconi may have a hard time holding onto power without some dramatic 11th-hour deal making.

"We are convinced we have the numbers we need in both houses," Maurizio Gasparri, Senate leader of the prime minister's People of Liberty party, said on Tuesday after the budget was passed.

A day earlier, Antonio Di Pietro, a leading opposition figure, disagreed completely: "It seems clear that the end of the Berlusconi era is finally coming to an end."

Fini remains the wild card. Most predict that with the support of him and his three-dozen allies in the lower house of parliament that Berlusconi would easily win the vote.

Fini has been less vocal in his criticisms of Berlusconi in recent days, but has yet to say he will throw his support behind the prime minister.

There has been great speculation that Berlusconi's allies have been hard at work trying to work on a compromise deal that would be enough to entice Fini back into the Berlusconi fold.

The budget, which passed 167 votes to 127, with five abstentions, includes billions in cutbacks, including reduction in funding to regional and municipal governments, lower spending on arts and culture, environmental protection, foreign aid, and wage cuts for government workers.

Italy is hoping the budget will help get its budget deficit under control. The deficit is forecast to end this year at 5.0 percent of the country's gross domestic product, well over the European Union's cap of a 3.0 percent of GDP deficit for countries that use the euro currency.

Italy predicts the deficit will total 3.9 percent of GDP next year while the EU estimates 4.2 percent.

Italy's total public debt is 118 percent of GDP, by far the highest in the European Union and one of the highest levels of government debt in the world.

Pollsters say that declining public services, including a lack of action in solving the trash crisis in Naples and preventing the collapse of three walls in the archeological site of Pompeii, are among the factors that have helped erode Berlusconi's support levels to near all-time lows.

Source: Xinhua


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