Former Italian Prime Minister Silvio Berlusconi reversed course and said he will support current premier Enrico Letta in a confidence vote today as a political crisis that has gripped the nation for five days abates.
Berlusconi, who announced his decision on the floor of the Senate, had previously vowed to oppose Letta and topple his five-month-old government.
“Italy needs a government that may produce those structural and institutional reforms the country needs in order to modernize itself,” Berlusconi, 77, said. “We have decided, not without inner turmoil, to express a vote of confidence for the government.”
Stocks and bonds rose as the political turmoil threatening the euro region’s third-largest economy abated. The benchmark FTSE MIB index rose 1.4 percent, while the yield on the Italian 10-year bond fell 4 basis points to 4.38 percent.
Berlusconi’s U-turn came as members of his own party defied him and pledged allegiance to Letta.
“I’m asking Parliament for courage and confidence,” the 47-year-old Letta said earlier today in a speech to the Senate. New elections would make Italy ungovernable and probably reproduce a stalemate, he said.
The turning point in the political battle came late yesterday when deputy Prime Minister Angelino Alfano, who quit the Cabinet on Sept. 28 at Berlusconi’s request only to have his resignation rescinded by Letta, said he would back the government.
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