Europe

Europe

Italy’s Berlusconi wins confidence vote

14 October 2011 19:59 (UTC +04:00)

Baku-APA. Premier Silvio Berlusconi kept his job Friday after a crucial confidence vote in Parliament, but financial analysts and critics were skeptical that would resolve Italy’s increasingly severe economic troubles,APA reports quoting Associated Press.

Berlusconi’s conservatives won in a 316-301 vote in Parliament’s lower house, barely above an absolute majority in the 630-seat house. After days of tension, the premier’s allies clapped with relief when the vote was announced, while opposition lawmakers described e as a Pyrrhic victory.

Protesters in Rome chanted anti-government slogans, shouting "Shame!" and hurling eggs toward Parliament. Italian TV reports from Milan showed about 20 young people trying unsuccessfully to enter a building where Goldman Sachs has its office, and spraying red paint on the entrance.

"The best signal that Italy could have sent to the markets would have been to boot Mr. Berlusconi out, but it has failed to do so," said Sony Kapoor, managing director of Re-Define an Economic Think Tank, shortly after the vote. "With Mr. Berlusconi still at the helm, there is nothing that Italy can do from within that will restore market confidence."

Berlusconi has been weakened by sex scandals, criticized for his handling of Italy’s worsening economy and facing repeated calls for his resignation from his political rivals, labor unions and parts of the business community that once considered him their savior.

Even some of his own allies have openly expressed disappointment, with at least two deserting the crucial vote Friday. Had he lost, Berlusconi would have been forced to resign about 1 1/2 years before the end of his term in 2013.

"Berlusconi is the last of the Mohicans, the only one who believes that with 316 votes he can solve his problems," said political rival Pier Ferdinando Casini, one of many who see Berlusconi’s near 20-year grip on power coming to an end.

In the meantime, popular anger has been rising. Rome is girding for major protests Saturday by demonstrators known as the "indignati," part of worldwide rallies targeting governments, banks and financial institutions.

Italy has found itself increasingly embroiled in Europe’s debt crisis over the past few months. It’s debt burden â€” about 120 percent of its national income â€” is second only to Greece in the 17-nation eurozone.

Three ratings agencies have downgraded Italy’s public debt, citing the country’s political gridlock and low growth prospects. Berlusconi’s government has been forced to enact a series of austerity measures to assure the markets that a strategy is in place.

However, investors remain skeptical that there’s the necessary political will to push through the big spending cuts and tax increases â€” fears that have driven Italy’s borrowing costs ever higher. Italy is considered now more of a financial danger than Spain partly because Berlusconi’s government has backtracked on several reform proposals.

The European Central Bank has been buying up Italian bonds in the markets for weeks, and without that, Italy could have found its borrowing rates rise to an unsustainable level.

Berlusconi has steadfastly held onto power despite the scandals and four criminal trials in Milan. He has always maintained his innocence and blamed what he says are overzealous, left-leaning prosecutors bent on ousting him.

He insists there is no alternative to his government and called the vote Friday an "ambush" by the opposition.

This week, Central Bank chief Mario Draghi, who takes over the helm of the European Central Bank on Nov. 1, urged the government to act more quickly to implement reforms that can spur growth.

Draghi warned that otherwise the rising cost of borrowing to service national debt will eat up "no small part" of the austerity package already approved by Parliament last month.