ROME — Former Prime Minister Silvio Berlusconi threatened to withdraw his party’s support from Prime Minister Mario Monti, leaving the government teetering and sending Italian bond yields to the biggest gain in three months.
Monti today postponed a Cabinet meeting at his office in central Rome and rushed to the nearby Senate to attend a confidence vote after Maurizio Gasparri, head of Berlusconi’s People of Liberty (PDL) party in the chamber, announced his forces would move to a “position of abstention.”
The decision by the PDL came about 12 hours after Berlusconi criticized the government and said he may run in elections due within months.
The yield on Italy’s benchmark 10-year bond rose 10 basis points to 4.55 percent at 3:00 p.m. in Rome, heading for the biggest one-day gain since Sept. 10 and increasing the difference with comparable German bunds by 14 basis points to 324 basis points. Italy’s benchmark FTSE MIB stock index declined 0.9 percent as equities elsewhere in Europe rose.
Monti’s economic stimulus bill survived the vote, though the PDL’s move left the premier’s majority in jeopardy. Anna Finocchiaro, head of the Democratic Party in the Senate, called on Monti to consult President Giorgio Napolitano on the future of the government.
The Democratic Party, which leads in opinion polls, also supports Monti in parliament.
Monti’s Cabinet was meeting, and the premier was expected to make a public statement.
Monti, an unelected technocrat, is facing a disintegration of his coalition as lawmakers burnish their campaign platforms for the general election next year.
Elections, which must be held by May, may come earlier if PDL or another of Monti’s main supporters withdraw their backing. Berlusconi, who is seeking to disown his ties to Monti’s austerity agenda, criticized the government late yesterday.
“We can’t go on like this,” Berlusconi, 76, said in a statement announcing that he was considering running again in the election. “I can’t allow my country to precipitate in a recessionary spiral without end.”
Monti may need to seek a confidence vote in Parliament to show he can still govern, said Raffaele De Mucci, professor of politics at the Luiss University in Rome.
“Monti may have to go to the presidential palace and ask the President of the Republic to verify his confidence in Parliament, forcing everyone to assume their responsibilities and show their cards, otherwise the situation could become ungovernable,” De Mucci said.
Berlusconi’s move today was more symbolic as People of Liberty had the numbers to block the Senate vote and bring down Monti’s government.
Abstentions by PDL senators gave Monti a quorum, without which the vote would have failed.
The decision to withhold support for the government came after Development Minister Corrado Passera today criticized Berlusconi’s possible return, saying “anything that will make the rest of the world and our partners think that that we would be turning back is not good for Italy.”
The remarks, from a member of a so-called technical government angered members of Berlusconi’s party, with several denouncing the comments during the Senate debate. Passera was the sponsor of the bill voted on today.
Berlusconi, a billionaire media magnate, is making his first push to regain power since his inability to contain the sovereign debt crisis forced him to resign the premiership in November 2011.
Since then, his PDL’s popularity has sunk in opinion polls amid corruption scandals at the party and Berlusconi’s personal criminal trials.
Berlusconi was convicted of fraud by a Milan court in October and sentenced to four years in prison. He remains free as his lawyers appeal.
The ex-premier is also standing trial on charges of abuse of power and engaging a minor in prostitution, allegations he has denied.
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