Letta puts govt's future in parliament's hands
Berlusconi's party split after ministers quit left-right admin30 September, 16:46
Tension has been bubbling up within the alliance supporting Letta's administration since the supreme court upheld a tax-fraud conviction against Berlusconi last month, but it spilled over on Saturday when five PdL ministers heeded the ex-premier's call for them to resign.
Letta, a member of the centre-left Democratic Party (PD), is set to address the Senate on Wednesday morning.
The executive is expected to be put to a confidence vote. There is a slender possibility that Letta's government could win the confidence vote as the PdL is deeply divided over the move to spark off a political crisis just as the country is showing signs of emerging from its longest recession in over two decades.
Indeed, all five PdL ministers have expressed reservations about the direction their party, which is being revamped and reverting to its former name, Forza Italia (FI), is taking.
Deputy Premier and Interior Minister Angelino Alfano, the PdL secretary, even said Sunday that he may become a "different sort of Berlusconi-ite" if the party becomes "extremist".
The PdL, which is divided between doves like Alfano and hawks who approve of Berlusconi's hard line, will have what looks set to be a tense meeting later on Monday.
President Giorgio Napolitano, who has a key role in times of government crisis, has indicated he will only dissolve parliament for fresh elections if there is no chance of Letta continuing or a new government being formed.
Berlusconi has called for new elections to be held as soon as possible.
But there are fears that a return to the polls under the current dysfunctional election law will only lead to a similarly inconclusive result to February's general election, which was followed by two months of deadlock that only ended when the PdL and the PD formed an unnatural alliance. There is speculation that Letta may be able to continue at the helm of government if he can muster support from rebels from the PdL and from the anti-establishment 5-Star Movement (M5S) in the Senate.
The PD, the biggest group in parliament, has a comfortable majority in the Lower House.
But PD Secretary Guglielmo Epifani said Monday that he was not in favour of the government staying in power if it were unsteady and reliant on "deserters" from other parties If the government collapses, Napolitano may give someone a mandate to form a short-term administration tasked with passing the 2014 budget law and reforming the election system, so a new vote can then be held. Fitch said Monday that Italy's credit rating was in danger of being downgraded due to the turmoil. The rating agency said the possibility of the government collapsing could affect Italy's ability to hit its budget targets. Giorgio Squinz, the head of industrial employers' confederation Confindustria, said Italy risked being effectively ruled by the European Union from Brussels.
Squinzi said he feared the country could return to the situation it faced late in 2011, when Silvio Berlusconi was forced to quit as premier to make way for Mario Monti's emergency technocrat administration due to the threat of a Greek-style financial meltdown. Monti's government steered Italy away from the centre of the eurozone crisis via painful austerity measures. On that occasion Rome avoided the indignity of having policy dictated to it like Greece did after its international bailouts. But Squinzi is worried things could get even worse if Letta's government, which replaced Monti's executive in April, sinks. "I hope that all this instability does not lead to orders from Europe and not management by (externally appointed) commissioners," Squinzi said. "I hope that a sense of responsibility prevails in those who govern us. "I wouldn't like us to be in the same situation as in October 2011 (a month before Berlusconi quit)".
He added that it was "fundamentally important" that the 2014 budget law be passed with the measures Letta said it would feature, including cuts to labour taxes.
Letta's administration has been fragile from its birth, but the threat of crisis has been constant since the supreme court upheld a four-year conviction against Berlusconi - three years of which have been commuted because of an amnesty - for tax fraud at his Media empire.
Berlusconi is furious that his foes-turned-alliance-partners in the PD are intent on voting in favour of him being ejected from parliament on a Senate panel and then on the floor of the Upper House. The situation precipitated on Thursday, when PdL lawmakers wrote out their resignations and said they would hand them in if Berlusconi is stripped of his seat in the Senate. That threat led Letta to put on ice a decree featuring several economic measures, including the postponement of an increase in the top band of value added tax (VAT) scheduled to take effect Tuesday, at a heated cabinet meeting late Friday. He said he would not go on unless he had support for his government with "no ifs, no buts''. Berlusconi said Saturday that this ultimatum was ''unacceptable'' and called on the PdL's ministers to quit the fragile executive.