Updated, 16.01
ITALIAN PRIME MINISTER Silvio Berlusconi has won a crucial financial vote in his country’s parliament – but in doing so has lost his parliamentary majority, sending the cost of borrowing to new record highs.
The vote in the Italian chamber of deputies, which approved the country’s budget estimates for 2010, was passed with 308 votes in favour and only one vote against.
The main opposition parties abstained in the vote – ensuring that it passed comfortably – but Berlusconi’s failure to win at least 316 votes means he has lost his majority in the chamber, which has 630 members.
The BBC said Berlusconi was described as “incredulous” at the result of the vote, and reportedly immediately asked to see the official voting record to examine which of his 344 deputies had voted against him. Italian media had predicted that the premier would secure at least 310 votes.
The cost of borrowing for the Italian government reached new record highs in the aftermath of the vote, reaching 6.7 per cent for 10-year bonds shortly after the result of the vote was announced.
Any further increase in the cost of borrowing for the government would likely push Italy into needing a bailout from the EU and IMF.
It is now likely that Berlusconi will face another vote of confidence in his leadership – and having only narrowly survived two such votes in the past few months, may now find himself squeezed out of power.
Berlusconi may also opt to resign, or to propose an alternative prime minister, in order to try and secure some sort of political stability.
Among the other possibilities, the Guardian reports, is that Berlusconi can try either to form a broader coalition – which would almost certainly mean having to step aside for a more universally acceptable PM – or even forming a grand coalition.
Berlusconi could also opt to seek a dissolution of the parliament – though with Italian general election campaigns lasting for 60 days, an election would do little to end the fear that continues to shape the country’s immediate economic future.
Earlier today, Umberto Bossi – who leads the Northern League party, the junior partner in Berlusconi’s ruling coalition, called on the 75-old-premier to step down.
Berlusconi’s finance minister Giulio Tremonti had flown back early from Brussels in order to participate in the vote, fearing that the passage of the Budget figures could hinge on a closer vote.
The meeting in Brussels had seen the European Union’s 27 finance ministers officially adopt a new package of measures, proposed by the European Parliament, to strength economic oversight and governance in the eurozone.
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