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Italian center right warns of coalition collapse over Berlusconi vote

Sunday, 25 Aug 2013 | 3:42 PM ET
Silvio Berlusconi attends a football match between AC Milan and Juventus FC.
Claudio Villa | Getty Images
Silvio Berlusconi attends a football match between AC Milan and Juventus FC.

Members of Silvio Berlusconi's center-right party on Sunday openly warned they would bring down the government if their center-left coalition allies voted next month to expel the former prime minister from parliament.

Relations between Berlusconi's People of Freedom (PDL) party and Prime Minister Enrico Letta's Democratic Party (PD) are close to breaking point ahead of the vote in the Senate on whether to expel the 76-year-old over his tax fraud conviction.

"Early elections will be inevitable if the PD votes to remove Berlusconi and in the case that President (Giorgio) Napolitano decides that no other viable majorities exist," PDL Senator Sandro Bondi told Corriere della Sera after a party summit on Saturday.

Bondi, a close ally of Berlusconi, said the PDL had agreed at the meeting to withdraw their ministers from the government if the billionaire loses his place as a senator, and that they were ready to return to elections with the media mogul as their prime ministerial candidate.

Letta has warned that the collapse of the government would undermine a nascent economy recovery as Italy tries to emerge from its longest post-war recession. He has nevertheless expressed confidence the coalition's problems can be overcome.

Italy confirms Berlusconi's tax fraud conviction
CNBC's Scott Cohn reports Italy's Supreme Court is upholding former prime minister, Silvio Berlusconi's tax fraud conviction. The court is also ordering a review of the ban on serving in public office.

The premier's fragile left-right government has been racked by disagreements since the two main parties were forced to form a coalition after a deadlocked national election in February.

He has been struggling to reconcile competing demands for tax cuts and job-creating measures to pull the economy out of the two-year recession with pledges to shore up battered public finances and cut state debt.

Another of Berlusconi's loyal allies, PDL deputy Daniela Santanche, told la Repubblica daily that the hawks of the PDL had won the debate at the party summit in his Milan villa on Saturday and that Letta's government was "finished."

"There are no alternatives to a government crisis because others have decided to deny the political feasibility of a leader that millions of Italians voted for," Santanche said.

She was later criticized by other PDL members for suggesting there were divisions between hawks and doves in the party when they are trying to present a united front.

'Ultimatum surreal'

Members of the PD, which holds more than a third of the 315 Senate seats, reacted angrily to the threats on Sunday and held to the view that all citizens are equal before the law.

"This ultimatum is surreal and frankly incomprehensible," PD senator Nicola Latorre told La Stampa daily. "The exchange they are asking us for is unacceptable: the survival of the government in return for a violation of the law," he said.

The two parties also renewed bickering on Sunday over the unpopular IMU property tax. While PDL members repeated calls to abolish it, Deputy Economy Minister Stefano Fassina from the PD told Sky Italia there were not enough resources available to cancel it for wealthy households.

The government is aiming to reach an agreement on how to reform the property tax at a cabinet meeting on Wednesday.

A Senate committee is due to begin hearing arguments on whether to eject Berlusconi on Sept. 9, before a vote of the assembly later in the month.

Berlusconi is desperately trying to find a way to stay in the political game despite a four-year jail sentence, commuted to one year, for a massive tax fraud at his Mediaset broadcasting empire. He is expected to start serving his term, either under house arrest or doing social work, in mid-October.

His lieutenants are piling on pressure in the hope of forcing the PD to at least delay any Senate judgment. They have also unsuccessfully lobbied President Napolitano for a pardon.

Torpedoing the government could actually backfire for Berlusconi, as analysts and doves in his party say Letta could form a new coalition with the help of PDL rebels and members of the populist 5-Star Movement of comedian Beppe Grillo.

If Italy went to elections, Berlusconi would not be able to use his campaigning power to the full and Letta has warned that Italians will punish anyone who causes a crisis during such a sensitive period for the economy.

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