Italian Premier Silvio Berlusconi narrowly survived a confidence vote Friday in Parliament,the latest of dozens he has faced,but markets were not reassured that outcome was enough to solve Italys growing economic crisis.
Berlusconis conservatives won 316-301 in Parliaments lower house,and his allies clapped in relief at the result after days of political tension and uncertainty. Had he lost,the 75-year-old Berlusconi would have been forced to resign about 1 1/2 years before the end of his term in 2013,effectively ending his political career.
The best signal that Italy could have sent to the markets would have been to boot Berlusconi out,but it has failed to do so, said Sony Kapoor,managing director of Re-Define an Economic Think Tank. With Berlusconi still at the helm,there is nothing that Italy can do from within that will restore market confidence.
Three ratings agencies have downgraded Italys public debt,citing the countrys political gridlock and its low growth prospects. Berlusconi has been weakened by sex scandals,criticised for his handling of Italys troubled economy and faced repeated calls for his resignation from his political rivals,labour unions and even some business leaders. Even some of his own allies have openly expressed disappointment,with at least two deserting the vote Friday.
Italy has found itself increasingly embroiled in Europes debt crisis over the past few months. Its debt burden,about 120 per cent of its national income,is second only to Greece in the 17-nation eurozone.
Berlusconi has steadfastly hung 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.