Brussels, 02/10/2013 (Agence Europe) - On Wednesday 2 October, the government of Enrico Letta obtained a large majority (235 votes in favour and 70 against out of the 307 MPs who voted) during the vote of confidence in it at the Italian Senate. This vote was to verify whether it still enjoyed a Parliamentary majority.
This result was achieved by a last-minute about-turn by Silvio Berlusconi, who came to the tribune personally, to express the support of his political group, the PDL (centre-right) after he had, however, ordered five ministers and members of this group to resign en bloc from the centre-left/centre-right coalition government on Saturday 28 September. This would have subsequently created a political crisis in which Italy would have found itself at the mercy of worsening recession and increasing debt (-1.8% forecast for 2013, 127% of its GDP) and would have marked a new period of uncertainty for the Eurozone.
The markets immediately responded to the news with a rise of 1.27% on the Milan stock exchange, following the falls of 2% on Monday and falls of 4.54% and 258 basis points respectively in ten-year state bonds and the differential with the German Bund rates, after having been at 4.73% and 304 basis points respectively before (the highest levels since the end of June).
Prospects of political stability therefore make the chances of European Commission tutelage in the event of non-respect of meeting public deficit and debt reduction commitments, more remote, and also alleviate tensions in the Eurozone.
Berlusconi's about-turn illustrate that he is determined to keep his PDL party together. This has been threatened by implosion following the defection announced by Angelino Alfano, the chosen successor to Berlusconi and number two in the government, as well as 23 senators who announced, together with Senators from other groups that they would be setting up a People's Party, a new centre-right grouping that was prepared to support Enrico Letta's government until the end of its legislature in 2015. In this connection, we are also able to interpret a “responsible” initiative by Berlusconi, two days before the vote planned on 4 October at the Senate on ending his mandate as a senator, following his definitive guilty verdict for tax fraud on 1 August last. (FG/transl.fl)