November 15, 2010 / 3:07 PM / 9 years ago

Rebels pull out of Berlusconi government

ROME (Reuters) - The rebel group that has challenged Italian Prime Minister Silvio Berlusconi pulled out of his struggling centre-right government on Monday, heightening prospects of early elections in the coming months.

Italian President Giorgio Napolitano (L) talks with Italy's lower house speaker Gianfranco Fini during a meeting at the parliament in Rome November 15, 2010. REUTERS/Italian Presidency Press Office/Handout

EU Affairs Minister Andrea Ronchi, Deputy Industry Minister Adolfo Urso and two undersecretaries loyal to Berlusconi’s rival Gianfranco Fini handed in their resignations, ratcheting up pressure on the 74 year-old prime minister.

“We all agree today that we need to move to a new phase in the Italian centre-right,” Urso, one of the coordinators of Future and Freedom for Italy (FLI), the new party created by Fini, said on SkyTG24 television.

The departures will not immediately affect Berlusconi’s ability to govern but they underline the depth of a drawn-out political crisis that has absorbed the government’s attention and energy for months.

“With the withdrawal of Fini’s government members, the betrayal has begun,” said Welfare Minister Maurizio Sacconi, a Berlusconi loyalist.

Several possibilities are now open, ranging from a general election, likely to be held in the spring, to the appointment by President Giorgio Napolitano of an interim government which would run business until the next scheduled elections in 2013.

Napolitano is due to meet Fini, who is also speaker of the lower house of parliament, and Senate speaker Renato Schifani on Tuesday to work out the complicated parliamentary timetable that could produce the decisive showdown.

Berlusconi, whose ratings have sunk to their lowest levels since he won power in 2008, has announced a confidence vote in parliament after the 2011 budget is passed — something that is expected by mid-December.

He meets Umberto Bossi, head of his allies in the Northern League, to discuss tactics later on Monday.

IN THE BALANCE

The future of the government has hung in the balance since the summer when Berlusconi forced Fini and a group of his supporters out of the ruling People of Freedom (PDL) party the two men created in 2008.

Fini, who accuses Berlusconi of running the government like one of the companies in his business empire, has stepped up his attacks following the recent uproar over the prime minister’s dealings with a teenaged Moroccan nightclub dancer.

With Italy’s economy struggling to emerge from its worst postwar recession and the government’s image battered by scandals ranging from corruption to waste disposal, Berlusconi has been unable to shrug off the problems as he has done with similar controversies in the past.

“I think the main reason he has lost credit and lost support is for economic reasons,” said James Walston, political science professor at the American University in Rome.

“It is very clear that his government has not been able to deal with the recession, the number of businesses that have been going under, the number of unemployed, it continues to rise.”

The latest troubles have come at a particularly sensitive moment in which the euro zone debt crisis has picked up in intensity with renewed worries over Ireland spilling over to affect other countries including Italy.

Italy, with a public debt equivalent to almost 120 percent of its gross domestic product, has so far avoided the turmoil seen in Ireland or Greece but politicians on all sides are acutely aware of the danger that markets may be unnerved by prolonged political uncertainty.

Thus far, investors have been reassured by the government’s drive to contain the public deficit and there has been a general agreement over the importance of passing the 2011 budget law next month before coming to any decision over an election.

Opinion polls suggest that Berlusconi would probably return to power after an election but could lose control of the Senate, which would greatly hamper his freedom of action and could sow the seeds of a renewed bout of turmoil further along the line.

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