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Opposition seeks quick budget before ousting Berlusconi

November 18, 2010

By Guy Dinmore in Rome, Published: November 16 2010 

Italy’s opposition leaders have called for speedy passage of the government’s 2011 budget bill so they can get on to the more important business of trying to bring down prime minister Silvio Berlusconi’s faltering centre-right coalition.

The austerity budget was watered down by Giulio Tremonti, finance minister, after pressure from ministries and regional governments, and went before the lower house of parliament on Tuesday.

Opposition leaders who demanded a vote of no-confidence in the government, warned that a prolonged political crisis risked provoking “serious internal and international consequences” for Italy. They called on speakers of both chambers to bring the budget bill to the senate next week for final approval by the end of the month.

Despite the opposition’s haste, a date of December 14 was set for the votes in both the lower house and the senate, giving Mr Berlusconi, prime minister, nearly a month to try to shore up his coalition. On the same day the Constitutional Court will rule on the legitimacy of a law passed this year which allows Mr Berlusconi to avoid appearing in court in two trials where he is accused of corrupting his lawyer and involvement in fraud allegedly committed by his media business. He denies the charges.

Pier Ferdinando Casini, leader of the opposition centrist UDC party, accused the prime minister of wanting to prolong the budget process.

Mr Berlusconi wanted more time for his “shopping campaign”, Mr Casini told foreign reporters, referring to the prime minister’s efforts to win over wavering deputies in the lower house. He is no longer assured a majority there following a decision by his former ally, Gianfranco Fini, to pull his Future and Liberty party out of the ruling coalition.

Weakened by scandals surrounding his private life, Mr Berlusconi has said repeatedly he would ask Giorgio Napolitano, head of state, to call early elections should he lose a parliamentary vote of no-confidence.

Mr Casini, who broke his own alliance with Mr Berlusconi four years ago, made clear he would prefer to avoid elections and instead seek a “grand coalition” of the major parties, but without Mr Berlusconi and the right wing Northern League.

Asked to comment on suggestions that Mario Draghi, governor of the Bank of Italy, could lead such a caretaker government, Mr Casini replied: “I have great faith in Draghi. He would be the best person in a crisis like this.”

However, Mr Casini also noted that Mr Draghi had his sights on replacing Jean-Claude Trichet as head of the European Central Bank next year.

Amid all the manoeuvring to bring down Mr Berlusconi, the opposition is talking up the dangers for Italy of political instability at a time of turbulence on international debt markets.

For the moment at least, Italy remains far from the storm that has engulfed Greece and Ireland. Rainer Brüderle, Germany’s economy minister, told reporters in Rome he was relaxed about the state of Italy’s public finances, in spite of government debt running at 115 per cent of gross domestic product.

Goldman Sachs commented that Italy’s politicians had shown “wisdom” in not precipitating elections before approval of the 2011 budget.

Natacha Valla, the bank’s Italy economist, said the budget had been “softened” by €5.7bn ($7.7bn, £4.8bn) compared with the original draft but that “fiscal consolidation remains overall in safe waters in 2011”.

Among changes to the bill, the defence ministry has secured a 0.2 per cent increase after the first draft proposed a 10 per cent cut.

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