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2 Oct 2013
Italian PM wins vote of confidence but Berlusconi threat remains
FXstreet.com (London) - Despite his opponents caricaturing the former Italian PM as a modern day Nero, fiddling his accounts while Rome burns, Silvio Berlusconi today tried to perform a pastiche of Caesar, making a show of pardoning an almost-vanquished opponent.
But despite Berlusconi’s support in a confidence vote that he himself orchestrated, Prime Minister Enrico Letta would have survived the vote anyway - 229 yes votes to 70 noes.
Berlusconi’s turnaround was borne out of political necessity – a Letta victory against PDL opposition would have been embarrassing for the former PM and his party.
The decision helped to drive Italian markets, with the FTSE MIB up 1.4 percent so far. But outside irrational exuberance of equity markets, Italian debt yields remain high, at 4.38 percent – a major concern for the world’s third biggest bond market.
Anybody who thinks that today’s vote means the end of Berlusconi’s huge influence on Italian politics is likely in for a nasty surprise. Though he has lost some face in his political manoeuvrings, he will almost certainly be back to try and usurp Letta again. And short of Cato-like acts, Letta has few options to stabilise the Italian government.
But despite Berlusconi’s support in a confidence vote that he himself orchestrated, Prime Minister Enrico Letta would have survived the vote anyway - 229 yes votes to 70 noes.
Berlusconi’s turnaround was borne out of political necessity – a Letta victory against PDL opposition would have been embarrassing for the former PM and his party.
The decision helped to drive Italian markets, with the FTSE MIB up 1.4 percent so far. But outside irrational exuberance of equity markets, Italian debt yields remain high, at 4.38 percent – a major concern for the world’s third biggest bond market.
Anybody who thinks that today’s vote means the end of Berlusconi’s huge influence on Italian politics is likely in for a nasty surprise. Though he has lost some face in his political manoeuvrings, he will almost certainly be back to try and usurp Letta again. And short of Cato-like acts, Letta has few options to stabilise the Italian government.