Govt wins confidence vote, Berlusconi’s FI joins opposition

(ANSA) – Rome, November 27 – Premier Enrico Letta’s administration survived a confidence vote in the Senate on its 2014 budget bill early on Wednesday despite the decision of Silvio Berlusconi’s Forza Italia (FI) party to vote against, taking it out of the government majority and into the ranks of the opposition.

FI’s switch came with the Senate expected to vote eject three-time premier Berlusconi later on Wednesday on the basis of a 2012 anti-corruption law after a tax-fraud conviction was upheld by the supreme court in August. Berlusconi is furious that his former alliance partners in Letta’s centre-left Democratic Party are backing the bid for him to be stripped of his parliamentary seat and says the anti-corruption law is being applied retroactively in his case.

Letta’s left-right government, cobbled together in April to end two months of political deadlock after February’s inconclusive general election, would have collapsed if it had lost the confidence vote.

It survived thanks to the support of Deputy Premier and Interior Minister Angelino Alfano’s New Centre Right (NCD) party, which is made up of moderates who this month split from Berlusconi’s loyalists. The package now moves to the Lower House after clearing the Senate with 171 votes in favour and 135 against. The vote was just part of the process to approve the budget bill that needs to be completed by the end of the year. The package has been criticised in Italy for being too timid in tax cuts and not doing enough to stoke growth, as the country seeks to emerge from its longest recession in over two decades. There is also confusion about a new local tax to replace the IMU property tax, which was scrapped on primary residences earlier this year after a series of ultimatums from Berlusconi’s party. Letta has said the package should be praised for cutting taxes, rather than raising them, while keeping the country on course to stay within the EU’s 3% deficit-to-GDP-ratio limit.

The European Commission (EC), meanwhile, recently said Italy risks breaking the EU growth and stability pact after analysing the budget, saying it did not do enough to bring down the country’s massive public debt of over two trillion euros, around 133% of GDP. The government responded that the EC had failed to properly account for the government’s plans for a round of spending cuts and for divestments expected to raise 10 to 12 billion euros.