The future of Italian Prime Minister Silvio Berlusconi is increasingly in doubt after being pressured to step down as Italy’s borrowing costs surged to record highs since the formation of the single currency.
The Italian 10-year government bond yield spread hit its widest levels since 1997 against the German bund today and the euro is under pressure.
Berlusconi’s government faces a parliamentary vote on Tuesday with rebels threatening to bring down his government over its failure to adopt structural reforms. Several of his once-faithful party members have threatened to vote against the government or abstain from voting on Tuesday during a scheduled ballot on budget matters in the Italian lower house of Parliament.
Two Berlusconi allies have already defected to the opposition party last week. Six others called for Berlusconi to resign and seek a broader coalition, Italian newspaper Repubblica reported yesterday.
“I fear we no longer have a majority in parliament,” Interior Minister Roberto Maroni said on a talk show yesterday. Maroni, a member of the Northern League party, part of the prime minister’s coalition, said he backs early elections.
As Berlusconi loses majority backing, opposition leaders are also trying to gather support for a no- confidence vote, regardless of the outcome of tomorrow’s ballot, to try to topple the leader who has governed for more than half of the 17 years since he entered politics in 1994. Berlusconi has faced only one such vote, which he survived, in December of last year.
Berlusconi issued a statement today saying he denies any resignation reports and refuses to step down.