Vote makes Premier's resignation imminent

Italy's Prime Minister Silvio Berlusconi may have won the budget vote in Parliament on Tuesday but he has lost his absolute majority in the House making a resignation imminent. The Prime Minister who has now become the focus of dislike across Italy has stoutly refused to resign. Mr. Berlusconi was put on notice by one of his strongest allies, Umberto Bossi, of the powerful Northern League party who called for the Premier's immediate departure.

Markets are holding their breath as they are in the case of Greece where uncertainty about forming the next government continues to persist after Prime Minister Georges Papandreou agreed to resign in favour of a technocratic government that expected to help tide over Greec's current crisis and lead the country to early elections.

Mr. Bossi in his ultimatum to Mr. Berlusconi said he should be replaced by Angelino Alfano, the General Secretary of the Prime Minister's People of Freedom party. Mr. Berlusconi's ruling conservative coalition won 308 votes but over 320 legislators did not wish to take part in the vote, a clear sign that the Premier had lost his parliamentary majority. The opposition has called on President Giorgio Napolitano to impose a solution on the deadlocked political situation in Italy. Italy's borrowing costs have skyrocketed and the country is now paying strangulating interest rates of 6.7 per cent. Mr. Berlusconi's position has clearly become untenable.

Italy has pushed Greece off the radar screens of European markets which rose slightly following news of Mr. Berlusconi's failure to retain his majority in parliament. Clearly the markets are of the opinion that Mr. Berlusconi is now part of Italy's problem rather then a solution to it. Mr. Napolitani can now call for the resignation of Mr. Berlusconi. Observers expect him to appoint Mr. Mario Monti, former EU commissioner to form a transitional government before holding fresh elections. But Mr. Berlusconi will have none of that.

“After me, only elections. No interim or broad-based governments with a puppet premier. I've got solid numbers and I'm not stepping down for Bersani, Di Pietro and Vendola. The opposition should vote for the crisis-containment measures presented in Brussels, and appreciated by everyone in the EU”, Italian daily Corriere della sera quoted Mr. Berlusconi as saying.

In Greece too political uncertainty continued with no government in sigh but the vary fact that talks on a national unity government are being held went a long way to tranquilising the markets.

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