Italy's Berlusconi survives vote of confidence

ROME?? Italian Premier Silvio Berlusconi survived a confidence vote in parliament on Friday, but his narrow majority raises doubts over his ability to govern effectively when the country needs a steady hand during its economic crisis.

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Berlusconi's conservatives won in a 316-301 vote in Parliament's lower house. After days of tension, the premier's allies clapped when the result of the vote was announced.

Berlusconi has been weakened by sex scandals and criticized for his handling of Italy's economy. He has been facing repeated calls for his resignation from his political rivals, labor unions and parts of the business community that once considered him their savior.

Even some of his own allies have openly expressed disappointment, with at least two deserting the crucial vote Friday.

"If a group of deputies inside his People of Freedom party had a precise strategy then probably Berlusconi's days would be numbered, but we are not there yet," political commentator Sergio Romano told Reuters.

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Had he lost the vote of confidence, Berlusconi would have been forced to resign ? about 1 1/2 years before the end of his term, in 2013.

Three ratings agencies have downgraded Italy's public debt, citing the country's political gridlock and low growth prospects as key reasons. The vote Friday appeared to do little to reassure markets.

"The best signal that Italy could have sent to the markets would have been to boot Mr. Berlusconi out, but it has failed to do so," said Sony Kapoor, managing director of Re-Define an Economic Think Tank, shortly after the vote. "With Mr. Berlusconi still at the helm, there is nothing that Italy can do from within that will restore market confidence."

Staying power
Berlusconi has shown amazing staying power in the face of prostitution scandals, howling gaffes and a very public separation from his wife. He has always maintained his innocence and blamed overzealous, left-leaning prosecutors bent on ousting him from power.

Berlusconi says he paid (but didn't sleep with) underage prostitute

Berlusconi told parliament on Thursday the fall of his government would be "a victory for those who want to see (Italy) fall into decline, catastrophe and the kind of speculation we have seen for months in Europe and Italy."

Many analysts see the opposite as true, and see Berlusconi's ineffectiveness in the face of crisis bringing either snap elections or an unelected government of technical experts ?preferable to the current malaise.

Nicholas Spiro, head of debt consultancy firm Spiro Sovereign Strategy, said a "Berlusconi premium" has been built into Italy's borrowing costs.

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His political demise "could trigger a favorable re-assessment of Italy in the minds of international investors, particularly if a non-partisan technocratic cabinet took office," Spiro said.

Reuters and The Associated Press contributed to this report.

Source: http://www.msnbc.msn.com/id/44899963/ns/world_news-europe/

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