Post date: Sep 28, 2013 8:59:46 PM
Italians fear further instability as former prime minister Silvio Berlusconi's ministers resign from the country's government.
ROME, ITALY (REUTERS) - Italian centre-right leader Silvio Berlusconi pulled his ministers out of the ruling coalition on Saturday (September 28), effectively bringing down the government of Prime Minister Enrico Letta and leaving Europe's third-largest economy in chaos.
The announcement, which will likely lead either to new elections or the formation of a new coalition, came a day after Letta challenged Berlusconi's party to support him in a confidence vote in parliament following weeks of tension.Late on Friday (September 27), the cabinet failed to agree vital fiscal measures to bring the budget deficit within European Union limits, leaving the fragile coalition of traditional rivals from the left and right near total breakdown.
Tensions between the two sides had been rising for weeks following moves to expel Berlusconi from parliament after his conviction for tax fraud last month.
This week PDL lawmakers threatened to walk out of parliament if he is expelled from the Senate over the conviction.
In central Rome, locals reacted mainly with anger to the news of the resignations.
"It is alarming that the ministers and parliamentarians follow the whims of a delinquent, as he's been defined by the magistrates. It is as if a thief condemned to serve four years in jail was leading our members of parliament. The people deserve better than that," said local resident Claudio Giorgi.
"This is a disaster for the country. It confirms once again that this party does not care about the good of the country," Monica Spinola said.
The ministers' resignations will further delay meaningful reforms in Italy, which is struggling with a two-year recession, a 2 trillion euro public debt and youth unemployment of around 40 percent.
"I think it's pure madness. In a country that follows the rule of law, the laws must be followed and respected. I feel like they've made a huge thing out of nothing. In reality, it shows a political will to allow a despot continue in politics and that in some way they do not want a future for this country," said Alfredo Accatino.
Opinion polls suggest the two main blocs in parliament have roughly equal support among voters and under Italy's widely criticised electoral system, any new election would probably produce another stalemate.
"Let's hope that they'll at least manage to form a government to carry out the electoral reforms and then we'll vote to have at least some stability," Lorenzo Collinisaid.
The political convulsions have increasingly worried investors, although with theEuropean Central Bank guaranteeing stability in the markets, there has so far been less panic than seen during previous crises.
Italy's borrowing costs hit a three-month high at an auction of 10-year bonds on Friday, while the premium investors demand to hold Italian government debt rather than German paper widened to about 267 basis points from under 250 at the start of the week.