Italian Prime Minister, Enrico Letta, scored a major political victory on Wednesday, as his Government comfortably won a confidence vote, seeing off a threat from former premier Silvio Berlusconi to bring down the ruling grand coalition.
Letta secured 235 votes in Italy’s upper chamber of parliament, the Senate. He risked falling short of securing the 161 majority by more than 20 seats if Berlusconi’s defection had materialised.
Seventy senators voted against.
In the Chamber of Deputies, Letta was later able to secure an absolute majority with just his centre-left Democratic Party: 435 deputies supported Letta, with 162 against.
In a last minute U-turn, Berlusconi had dropped his hostile plans.
“We have decided, not without internal torment, to express a vote of confidence in this government,” he said during a highly charged parliamentary debate.
Explaining his decision, he said Italy needed “a government that can adopt the structural and institutional reforms which the country needs to modernize itself.” The prime minister smiled and shook his head as the about-face was announced.
Luigi Zanda, who spoke for Letta’s Democratic Party (PD), said Berlusconi tried to “hide a political defeat which, however, is sharp and clear in the eyes of Italians.” Earlier, reports indicated that around 25 of the 91 senators from the former premier’s conservative People of Freedom (PDL) party were ready to break ranks and vote in favour of the government.
The PDL remained in disarray despite the last-minute turnaround, as Francesco Nitto Palma, a former justice minister, walked out of the chamber to avoid backing Letta. Other PDL senators followed his lead.
The PDL defectors were led by the party’s deputy leader and deputy prime minister, Angelino Alfano, as well as by public works minister Maurizio Lupi, who is connected to Communion and Liberation, an influential conservative Catholic movement.
News filtered that 26 dissenters, led by the party’s former parliamentary speaker Fabrizio Cicchitto, would break from the PDL and form a splinter group in the lower assembly, the Chamber of Deputies. But Lupi distanced himself from the initiative.
Meanwhile, PD officials claimed victory, saying that the government was no longer reliant on the whims of the PDL’s embattled leader.
“Silvio Berlusconi has been comprehensively defeated. As of today, he is politically irrelevant,” Stefano Fassina, a PD-affiliated junior economy minister, said.
Markets rejoiced at the positive resolution to the crisis. The main index on the Milan stock exchange, the FTSE MIB, was up 0.68 per cent at the close of trading, while a key sovereign risk indicator was down.
The yield differential between Italian and German 10-year bonds — known as spread — hovered around 256 basis points, compared to 261 at Tuesday’s market closing.
In his speech ahead of the vote, Letta stressed that the country needed political stability to emerge from a record-length recession and maintain markets’ confidence — a message that had been conveyed by the European Union and the International Monetary Fund.
“Italy is running a risk that could be fatal,” he said.
The premier said he wanted to remain in charge at least until the end of 2014, when Italy will complete its six-month stint as the EU’s rotating presidency.
He pledged to cut labour taxes as a way of reviving Italy’s moribund economy, and to meet EU deficit targets. Youth unemployment rose above 40 per cent in August, the highest level since current records begun in 1977.
In Brussels, European Commission President Jose Manuel Barroso said it was “very positive that the Italian government will be able to continue uninterrupted with the reforms it has embarked on,” and that an “artificial political crisis” had been averted.
Berlusconi threatened to pull out of the ruling alliance last week, after coalition allies refused to block procedures to expel him from parliament due to a tax fraud conviction. He is due to spend one year under house arrest or do community service.
A Senate committee was expected to approve Berlusconi’s ejection on Friday. The decision would have to be confirmed at a later stage by a plenary vote.
Letta dismissed requests to grant the former premier judicial immunity in return for his continued political support. “Under the rule of law, rulings must be enforced and are respected,” he said, amid boos from PDL ranks.
Speaking before the Chamber of Deputies after his Senate success, the prime minister stressed that he would have won the confidence vote “anyway,” even without Berlusconi’s late conversion.
The 47-year-old took office five months ago at the helm of an awkward coalition comprising the PD, centrists attached to former premier Mario Monti, and the PDL.