Italian Prime Minister Silvio Berlusconi must show today whether he still has enough support in Parliament to stay in power and implement austerity measures to trim the region’s second-biggest debt and bring down record borrowing costs.
The Chamber of Deputies will vote at 3:30 p.m. in Rome on a routine report on last year’s budget plan that will reveal whether Berlusconi retains a majority in the 630-seat house. It’s the first such test since three party members defected to join the opposition and six others publicly called on the premier to quit. Should Berlusconi fail to muster 316 votes, he would probably face a confidence vote that will decide his fate.
Berlusconi told key ministers at a meeting last night that he may consider stepping down should he not win an absolute majority in the vote, Ansa news agency reported, without saying where it got the information.
Staying in Power
“The worst outcome for the market would probably be if Berlusconi stays in power,”
Staying in Power “
The worst outcome for the market would probably be if Berlusconi stays in power,” Peter Schaffrik, head of European rates strategy at RBC Capital Markets in London, said in an interview. “As far as how big the market reaction is assuming he goes depends on what comes next.”
A report yesterday that Berlusconi’s resignation was imminent led to a surge in Italian stocks and the benchmark FTSE MIB stock index extended those gains, advancing 1.4 percent today at 10:55 a.m. in Milan. Berlusconi yesterday denied the reports and said he would call a confidence vote himself next week to secure passage of an austerity package that aims to boost growth in the region’s third-largest economy and lower the 1.9 trillion-euro ($2.6 trillion) debt.
Berlusconi told newspaper Libero that he would use the confidence vote to “look into the eyes of those who try to betray me.”
“The market’s bias is fairly clear. The question is; what comes afterward, assuming he falls?” Schaffrik said.
