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8 Nov, 2011 13:04

Sharks circle as Berlusconi treads water

Italy's PM has won a crucial finance vote amid fears that the country, which has the second-largest debt in the eurozone, could become the next Greece. And though he survived this vote, he can no longer count on an overall majority in the Chamber.

The Italian Chamber of Deputies voted on Tuesday to approve the country's austerity budget, but only because the opposition abstained from voting.With 308 voting to ratify the 2010 public accounts, Berlusconi failed to reach the 316 threshold necessary for an absolute majority in the 630 seat Chamber.Following the vote, the opposition immediately called on Berlusconi to resign. Pressure on the PM was mounting prior to the vote from within his center-right coalition government.On Tuesday, Umberto Bossi, the leader of the Northern League and Berlusconi's closest ally, joined the chorus of those calling for the PM to step down.Meanwhile, the markets remain pessimistic in their prognosis regarding Italy’s abilities to pay its debts.Tuesday’s vote was considered by many analysts to be a litmus test indicating whether Berlusconi would manage to salvage his majority in parliament and remain strong enough to get the parliamentarians’ trust if Italy is to carry out much needed reforms.Fears that Berlusconi’s government no longer has the strength to push through the austerity measures required to put the country’s economy back on track are very strong.Investors are concerned that the combination of low economic growth and $2.6 trillion (1.9 trillion euros) of debt could make Italy the next victim of the debt crisis in the eurozone.Now that Berlusconi has failed to secure a majority in Tuesday's vote, he will almost certainly face a confidence vote that will decide the fate of his cabinet.For the prime minister, this confidence vote will not be the first in his longstanding rule – he has survived dozens of such procedures – but this potential vote has already attracted special attention.Columnist Francesco Sisci told RT that Berlusconi “was supposed to be defeated in his confidence votes many times. However, he has won in the past and he might win again today." For Sisci, this situation in Italy is “more a political crisis than a financial crisis.”Several MPs from Berlusconi's party have defected to join the opposition in recent days. Six others have publicly called on the premier to quit.On Monday, Italy’s PM denied rumors about his possible resignation, insisting that government has all the support it needs.“Italy needs a PM who can get the confidence of the markets, whom the markets trust, to start the recovery and change necessary for Italy to cope with the present crisis,” Sisci told RT.Having survived today's test, the next milestone on his thorny path will be November 15, when the upper house of parliament, the Senate, is scheduled to vote on amendments to a package of harsh austerity measures.