Harsh words for Berlusconi
ITALY’s president yesterday issued a severe rebuke to Silvio Berlusconi and ruled out taking any action to stop his conviction after allies threatened to walk out of parliament.
ITALIAN President Giorgio Napolitano yesterday issued a severe rebuke to Silvio Berlusconi and ruled out taking any action to stop his conviction for tax fraud after allies threatened to walk out of parliament over his legal problems.
Italy has lurched closer to a crisis since Berlusconi, a partner in Prime Minister Enrico Letta’s coalition government, was sentenced to four years in prison last month, commuted to a year’s house arrest or community service, for tax fraud.
In an unusually strongly worded statement, Mr Napolitano, who would have to decide whether to dissolve parliament or try to build a new coalition if the government fell, said the “disturbing” threat by Berlusconi’s People of Freedom (PDL) party, now renamed Forza Italia, would undermine the functioning of parliament.
He said it would be especially worrying if its aim was to pressure him into calling elections. “There is still time, which I hope is used well, to find a way to express — if this is what the PDL parliamentarians want to do — their political and human empathy for the PDL president without putting at risk the functioning of the two houses of parliament,” he said.
He dismissed Berlusconi’s claims that judges who convicted him of tax fraud aimed at a “coup d’etat” as “absurd”, and ruled out any intervention against the verdict by Italy’s highest court.
On Wednesday, Berlusconi’s allies made their latest threat to bring down the government, saying they would resign if a special Senate committee meeting next Friday voted to strip the media tycoon of his seat in the upper house.
With the government working on next year’s budget, Mr Letta has said Italy needs political stability while it struggles to emerge from more than two years of recession, rein in a ¤2trillion public debt, and bring its budget deficit under control.
As the latest bout of political brinkmanship preoccupied Rome, rumours swirled that Italy faced a renewed downgrade of its government debt, sending the Milan bourse lower and pushing up borrowing costs on benchmark 10-year bonds. Italy’s 10-year yield rose eight basis points, or 0.08 percentage point, to 4.32% yesterday afternoon.
How serious a threat the latest move presents is difficult to assess given a series of contradictory signals from Berlusconi’s allies in parliament, who are divided between a faction of hardliners and more conciliatory doves.
Forza Italia’s deputy floor leader in the Senate, Maurizio Gasparri, said the decision to resign had been “by acclamation”. But Constitutional Reform Minister Gaetano Quagliariello, a Forza Italia moderate, said the centre-right had no joint commitment to stand down. “We didn’t vote for any resignation yesterday. If you’re going to resign, you do it, you don’t announce it,” he said.
Mr Letta’s centre-left Democratic Party (PD) said the threats could undermine the government as it grapples with problems ranging from strained public finances to the fate of big Italian firms including Telecom Italia and Alitalia, both embroiled in complex takeovers.
“Unfortunately, this back and forth with threats weakens an equilibrium which is already very delicate,” Senate floor leader of the PD, Luigi Zanda, told the daily Corriere della Sera.
The constant tension within the coalition has hobbled reform efforts and wasted weeks in wrangling over issues, including Berlusconi’s political future, while other urgent issues, notably the slipping budget deficit, require attention.
The next battle looms as early as today when the cabinet is due to agree on potentially painful measures to avert a looming rise in sales tax, another issue over which the centre-right has threatened to bring the government down.
The government must find about ¤1bn to finance the measure while also trimming another ¤2bn from the budget to bring the deficit under the European Union limits. The country auctions as much as ¤6bn of debt today.
Pressure on the coalition from Forza Italia rose hours after Mr Letta sought to reassure international investors in New York that Italy was a stable and reliable partner.
The Corriere della Sera daily said Mr Letta had informed Deputy Prime Minister and Forza Italia party secretary Angelino Alfano: “Angelino, if this mess keeps up, I could resign from here.”
Financial markets have shown none of the panic of government crises last year or at the height of the eurozone debt crisis. But borrowing costs have ticked up during the latest bout of uncertainty.