Nov. 8 (Bloomberg) -- Prime Minister Silvio Berlusconi should resign and be replaced by a leader capable of pulling Italy out of its debt misery, a senior lawmaker from German Chancellor Angela Merkel’s Christian Democratic Union said.
Italy is a rich country and capable of tackling its problems when led by a prime minister up to the job, said Michael Fuchs, CDU economy spokesman and deputy parliamentary leader, said on Bloomberg Television’s “On the Move” with Francine Lacqua. Fuchs said he’s confident Italy will begin to cure its budget problems under a new government.
Soaring yields on Italy’s bonds underscore “the need for Berlusconi to step down,” Fuchs, a former head of Germany’s BGA exporters’ federation, said in Berlin. “Everyone knows he’s not capable of solving the Italian crisis.”
Berlusconi faces a confidence vote in parliament in Rome today that will gauge whether he still has the support needed to push through budget cuts urged by Italy’s euro-region partners. Merkel and French President Nicolas Sarkozy have led calls on Berlusconi to redouble efforts to cut the region’s second-biggest debt load, worth 1.9 trillion euros ($2.6 trillion), and slash borrowing costs.
Italy, Europe’s third-largest economy after Germany and France, has untapped resources to help cushion austerity measures, said Fuchs. “There’s money enough in Italy to solve the problem,” said Fuchs, citing successful companies particularly in the country’s north. “I am quite positive that sooner or later Italy is going to make the necessary steps.”
Berlusconi told key ministers at a meeting last night that he may consider stepping down should he not win an absolute majority in the vote, Ansa news agency reported, without saying where it got the information. Italy’s 10-year bond fell three basis points to 6.62 percent at 9:57 a.m. London time, after rising to a record 6.74 percent.
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