Letta Delivers Italian Tax Deal by Appeasing Berlusconi

Italian Prime Minister Enrico Letta passed cuts to an unpopular property tax in a deal that may mend relations with Silvio Berlusconi, his partner in a fragile coalition government.

The government plans to cancel a tax on primary residences this year and replace it in 2014 with a municipal levy, Letta told reporters late yesterday after a cabinet meeting in Rome. Berlusconi, a three-time former premier, praised the deal and said Letta had lived up to his word.