Open

Coming up

Don't miss

Replay


LATEST SHOWS

FOCUS

Video: Milan is starting point for Syrian refugees’ European odyssey

Read more

MIDDLE EAST MATTERS

Terrorist ransoms: Should governments pay up for hostages?

Read more

ENCORE!

Kristen Stewart and Juliette Binoche star in 'Clouds of Sils Maria'

Read more

WEB NEWS

India: journalist launches "Rice Bucket Challenge"

Read more

WEB NEWS

Russian aid convoy: Mission accomplished?

Read more

WEB NEWS

Actor Orlando Jones lauches 'Bullet Bucket Challenge'

Read more

IN THE PAPERS

'Macron Economics'

Read more

BUSINESS DAILY

Macron-economics, the former banker turned minister

Read more

IN THE PAPERS

'The capital of sex, drugs, alcohol, trash and trashy tourism'

Read more

  • UN probe accuses Syrian regime, militants of ‘crimes against humanity’

    Read more

  • France’s Hollande puts young ex-banker in top economy post

    Read more

  • Video: Iraq’s Yazidis flee to spiritual capital of Lalish

    Read more

  • Video: Milan is starting point for Syrian refugees’ European odyssey

    Read more

  • Liberia sacks ministers who left amid Ebola outbreak

    Read more

  • Airstrikes and Assad - Obama’s military conundrum in Syria

    Read more

  • IMF’s Lagarde investigated in French corruption case

    Read more

  • American journalist held captive in Syria arrives in US

    Read more

  • In pictures: The ministers in France's new government

    Read more

  • 'Lasting' ceasefire agreed for Gaza, Abbas says

    Read more

  • Far-right ‘Russian Jihad’ fighters cross into Ukraine

    Read more

  • American 'Islamic State fighter' killed in Syria

    Read more

  • The ‘war’ at the heart of France’s ruling party

    Read more

  • Rebels 'shoot down' UN helicopter in South Sudan

    Read more

  • Air France pilots threaten September strike

    Read more

  • WHO seeks stricter regulation for e-cigarettes

    Read more

Europe

Berlusconi government 'may collapse' over EU demands

Video by FRANCE 24

Text by News Wires

Latest update : 2011-10-25

Italian Prime Minister Silvio Berlusconi faced growing signs of dissent in his coalition on Tuesday after one of his key allies in parliament warned that the government could fall over tough new reforms demanded by the European Union.

REUTERS - Italian Prime Minister Silvio Berlusconi faced growing pressure on Tuesday over European Union demands for economic reforms with his main coalition partner warning the government could fall over the issue.

EU leaders, led by German Chancellor Angela Merkel and French President Nicolas Sarkozy, have demanded that Berlusconi present firm plans for growth and reducing Italy’s massive debt in time for a summit meeting in Brussels on Wednesday.

However an emergency cabinet meeting late on Monday ended without agreement after Berlusconi’s coalition allies in the Northern League party refused to budge on their opposition to raising the pension age to 67 years.

Italy's poor economic climate

On Tuesday, as leaders from the coalition parties held a series of meetings in Rome, League leader Umberto Bossi said the disagreement could bring down the government and force early elections.

"The government is at risk," Bossi told reporters in parliament. "The situation is difficult, very dangerous. This is a dramatic moment," he said.

Berlusconi, mired in scandal and facing sliding approval ratings, has survived a series of confidence votes this year with the help of the League but analysts widely believe he cannot last much longer, predicting elections next spring.

Reflecting the potentially explosive danger of the pensions issue, the League’s party newspaper La Padania headlined "Final showdown on Pensions. Today is D-Day. No to a rise in the pension age, the League will not take a step back."

The threat of a government breakdown comes as Italy takes centre stage in the euro zone crisis with concerns mounting over its ability to stop a 1.8 trillion euro debt pile sliding out of control and putting the entire bloc at risk.

Yields on Italian 10-year bonds are just under 6 percent, not far short of levels they reached in August when the European Central Bank stepped in to cap Rome’s borrowing costs by buying Italian bonds on the market.

Humiliation

As ministers scrambled to hammer out a deal in time for the Wednesday deadline, Infrastructure Minister Altero Matteoli said there would be no cabinet meeting but that Berlusconi might still have proposals to take to Brussels.

“If there is an agreement, the prime minister will take it to Europe. We can pass the provision later,” he said.

Italy depends on ECB support to keep its borrowing costs at manageable levels but Berlusconi has reacted angrily to the pressure from Germany and France, widely seen as a humiliation.

Italians feel robbed by the new austerity measures

He issued a statement on Monday declaring that no EU country was in a position to give lessons to its partners.

The perceived slight, notably at a news conference in Brussels where Merkel and Sarkozy exchanged ironic smiles and laughter following a question about whether they were reassured after meeting Berlusconi, has caused some bitterness in Italy.

On Tuesday, President Giorgio Napolitano called on the government to show a credible commitment to reform but said expressions of mistrust at Italy’s engagement were “inappropriate and unpleasant”.

European Commission spokesman Amadeu Altafaj said the Commission had no intention of humiliating Italy but needed details on its reform plans.

Italy, once seen as safe from the crisis because of its relatively low deficit, a conservative financial system and high private savings, has passed a series of reforms since investors began to turn their fire on its debt in July.

But it has failed to convince markets worried that the deep divisions in the government will stymie painful reforms aimed at cutting the debt and boosting the stagnant economy.

Underlining the gloomy state of the economy, data on Tuesday showed consumer morale in October fell to its lowest level since July 2008.

Economy Minister Giulio Tremonti has promised a package of reforms that would open up closed professions, cut red tape and raise revenue though steps such as privatisations and a new wealth tax but the measures have been repeatedly delayed.

Date created : 2011-10-25

  • ITALY

    Berlusconi wants 'no lessons' on crisis

    Read more

  • MARKETS

    World stocks rally ahead of EU bailout summit

    Read more

  • ECONOMY

    Sarkozy and Merkel set for crunch EU debt crisis talks

    Read more

COMMENT(S)