Last weekend, Greek Prime Minister Papandreou, survived a “vote of confidence”, only to agree to step down as Prime Minister and leader of the Socialist party, in order to pave way for a new interim Prime Minister.
Tuesday, it became Italy’s Prime Minister’s turn, and although Berlusconi won a crucial 308 vote on budget reform in parliament, more than half of Italy’s 630 legislators did not vote. The latter is an ominous indicator of losing majority in parliament and dissent within Berlusconi’s own party.
Losing a majority in parliament means for Berlusconi to visit Italy’s President and to either resign (he has indicated he will not resign) or, by direction of the President, Berlusconi must now ask Italy’s parliament for a “vote of confidence”. Already this afternoon, Berlusconi coalition partner Lega Nord, asked the Prime Minister to relinquish his office.
Italy’s high riding Premier lost a lot in statute last week when he was forced to accept International Monetary Fund (IMF) oversight over Italy’s austerity measures and government spending cuts during the world’s top 20 nation G20 meeting at Cannes, France. After Greece, Italy has the highest debt to GDP ratio of euro zone countries and the risk is best seen in capital out-flow from Italy to more stable countries.(according to the FAZ – Banca d’Italia liabilities increased from 57 billion to 103 billion Euros in September alone)