Silvio Berlusconi faces crucial confidence vote

Italian premier Silvio Berlusconi faces a confidence vote in parliament today that is seen as the most serious threat to his political survival since the billionaire media baron was swept into power nearly two decades ago.

With an electorate weary of the scandals engulfing the premier and worried about Italy's economy, Mr Berlusconi is facing repeated calls for his resignation from his political rivals, unions and parts of the business community that once considered him their saviour.

But the latest threat to his three and a half year-old government has come from within his own fractious coalition.

Earlier this week, parliament's lower house failed to approve an article of the budget review by a single vote, with Mr Berlusconi's own financial minister missing the balloting by 30 seconds.

The failure of the measure prompted opposition MPs to demand Mr Berlusconi's immediate resignation and the country's ceremonial president to urge the premier to prove his government still retained a parliamentary majority.

The confidence vote will test that, and if the vote fails 75-year-old Mr Berlusconi will have to resign. Voting is expected to begin at 11.30am.

He made clear in a 15-minute address yesterday that he has no intention of stepping down - and that if he loses, the only alternative is new elections, not a government of non-political "technicians" as some have proposed.

"The government asks for a confirmation of confidence because it is deeply aware of the risks facing the country and because the deadlines imposed by the markets are not compatible with those of certain political rituals," Mr Berlusconi told MPs.

Mr Berlusconi has steadfastly hung on to power even as his leadership has been weakened by personal sex scandals that have even brought thinly veiled criticism from Pope Benedict XVI.

In addition, he is facing four criminal trials and Italy's increasingly precarious financial position and three ratings agencies have downgraded Italy's public debt, citing the political gridlock as a key reason.

But Mr Berlusconi has shown amazing staying power in the face of prostitution scandals, howling gaffes and a very public separation from his wife. He has always maintained his innocence and blamed overzealous, left-leaning prosecutors bent on ousting him from power.

"There is a boulder that weighs on this country. The magistrates," he has said of the prosecutors he has likened to left-wing terrorists.

Still, political analysts agree the scandals have cost him any hope of one day taking over Italy's ceremonial presidency, while he himself has ruled out running again when his term ends in 2013, hand-picking his former justice minister to succeed him.

So it is assumed that should he fall from power now, it will mark the end of a political drama that began when Mr Berlusconi won 1994 elections, pledging to keep "communists" at the gate and making still largely unfilled promises to modernise the country.

Opposition leader Pierluigi Bersani said surviving a confidence vote was not the same as governing a country.

"The government is not coping with the situation. The problems have all been laid out, but he only knows how to stay nailed to his seat by using tricks," he said.

Thousands of demonstrators known as the "indignati" are expected to attend a massive rally in Rome tomorrow, targeting the government, banks and financial institutions.

Mr Berlusconi's coalition partner, the Northern League, has indicated only grudging support for the leader, saying publicly that it is not sure Mr Berlusconi will complete his mandate in 2013.

The confidence vote comes at a crucial moment for Italy, which is under pressure to come up with growth-promoting measures to avert being dragged into Europe's widening sovereign debt crisis. Italy has one of the highest public debts in the eurozone, nearing 120% of gross domestic product.

Addressing MPs, Mr Berlusconi argued that only a democratically-elected government enjoyed the support needed to make the painful but necessary decisions to stabilise Italy's finances.

The opposition mostly boycotted the premier's appearance, leaving half the seats in parliament empty. But Mr Berlusconi was flanked by Northern League leader Umberto Bossi and foreign minister Franco Frattini and was frequently interrupted by applause in a show of unity.

On Wednesday, Central Bank chief Mario Draghi, who takes over the helm of the European Central Bank on November 1, urged the government to act more quickly to implement reforms that can spur growth - beyond the austerity package that put Italy on the path to balance its budget by 2013.

Mr Draghi warned that if not, the rising cost of borrowing to service national debt seen over the last three months would eat up "no small part" of the austerity package approved by Parliament last month.

The package of 54 billion euro (£44.5bn) in tax increases and spending cuts aims to balance Italy's budget by 2013.

AP