Fini group leaves Berlusconi government

Rome - The rebel group that has challenged Italian Prime Minister Silvio Berlusconi pulled out of his struggling centre-right government on Monday, heightening prospects of early elections in the coming months.

EU Affairs Minister Andrea Ronchi, Deputy Industry Minister Adolfo Urso and two undersecretaries loyal to Berlusconi's rival Gianfranco Fini handed in their resignations, ratcheting up pressure on the 74-year-old prime minister.

"We all agree today that we need to move to a new phase in the Italian centre-right," Urso, one of the co-ordinators of Future and Freedom for Italy (FLI), the new party created by Fini, said on SkyTG24 television.

The departures will not immediately affect Berlusconi's ability to govern but they underline the depth of a drawn-out political crisis that has absorbed the government's attention and energy for months.

"With the withdrawal of Fini's government members, the betrayal has begun," said Welfare Minister Maurizio Sacconi, a Berlusconi loyalist.

Government in the balance

Several possibilities are now open, ranging from a general election to the appointment by President Giorgio Napolitano of an interim government which would run business until the next scheduled elections in 2013.

Napolitano is due to meet Fini, who is also speaker of the lower house of parliament, and senate speaker Renato Schifani on Tuesday to work out the complicated parliamentary timetable that could produce the decisive showdown.

Berlusconi, whose ratings have sunk to their lowest levels since he won power in 2008, has announced a confidence vote in parliament after the 2011 budget is passed - something that is expected by mid-December.

The future of the government has hung in the balance since Berlusconi forced Fini and a group of his supporters out of the ruling People of Freedom (PDL) party the two men had created in 2008.

Berlusconi business

Fini, who accuses Berlusconi of running the government like one of the companies in his business empire, has stepped up his attacks following the recent uproar over the prime minister's dealings with a teenage Moroccan nightclub dancer.

The latest phase in their struggle has come at a particularly sensitive moment in which the euro zone debt crisis has picked up in intensity, with renewed worries over Ireland spilling over to affect other countries, including Italy.

Italy, one of the most heavily indebted states in the 27-member zone, has so far avoided the turmoil hitting countries like Ireland or Greece but politicians on all sides are acutely aware of the danger that markets may be unnerved by prolonged political uncertainty.

Thus far, investors have been reassured by the government's drive to contain the public deficit and there has been a general agreement over the importance of passing the 2011 budget law next month before coming to any decision over an election.

Fini's supporters and leading figures in the centrist and centre-left opposition would like Napolitano to name an interim government such as the one Italy had after a previous Berlusconi government lost power in 1994.

But Berlusconi and his allies in the federalist Northern League party have insisted that if he steps down there will be no alternative but to hold an election.

Opinion polls suggest that Berlusconi would probably return to power but could lose control of the senate, which would greatly hamper his freedom of action and could sow the seeds of a renewed bout of turmoil further along the line.

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