Dec. 7 (Bloomberg) -- Billionaire Silvio Berlusconi’s top political deputy called for an “orderly end” to Prime Minister Mario Monti’s government, saying the administration failed to develop a strategy to halt the recession.
The speech in parliament by Angelino Alfano, general secretary of Berlusconi’s People of Liberty party, increases pressure on the government and sets the stage for his party’s election campaign message. Former Premier Berlusconi threatened the government yesterday by partially withdrawing the People of Liberty’s parliamentary support in two confidence votes.
“The experience of Monti’s government has concluded in our estimation,” Alfano said in the speech. People of Liberty, Monti’s biggest backer in parliament, didn’t fully withdraw its support yesterday because “we don’t want the country and the institutions to go to the dogs.”
Alfano disowned his past support for Monti’s 13-month-old government, saying People of Liberty, or PDL, voted for the premier’s tax increases and liberalization measures out of a sense of duty. Monti’s policies were criticized by Alfano as failing to foster economic growth and hewing too closely to the interests of PDL’s coalition partner, Italy’s Democratic Party.
The yield on Italy’s benchmark 10-year bond fell 1 basis point to 4.56 percent after rising 13 points yesterday. The difference with comparable German bunds narrowed 1 basis point to 327 basis points. Italy’s benchmark FTSE MIB stock index slipped 1.3 percent after falling 0.8 percent yesterday.
PDL and the Democratic Party, or PD, are putting an end to their collaboration and squaring off in the race to succeed Monti. PD leader Pier Luigi Bersani, who spoke before Alfano, reiterated his support for Monti’s government.
“The events of the last 24 hours underscore that Italian politics is highly fractious and volatile,” Wolfango Piccoli, Eurasia Group practice head for Europe, said in a research note today. “Snap elections remain the most likely outcome of the ongoing political crisis.”
Berlusconi’s insurgency puts the remaining items on Monti’s agenda at risk. The premier, whose term expires by May, has called on President Giorgio Napolitano to mediate the dispute, with bills to overhaul electoral law and regional government supervision hanging in the balance. Alfano reiterated that PDL would support Monti’s budget measure.
Berlusconi, 76, is seeking to halt PDL’s slide in opinion polls and reassert his control in the party after his October conviction of fraud by a Milan court. A new link today on PDL’s website took supporters to a page called “The Berlusconi Governments,” dedicated to his achievements in office.
Support for PDL slipped to 18.2 percent from 23.5 percent in March, according to a Demos & Pi poll published in newspaper La Repubblica today. PD saw its backing rise to 37.8 percent, the highest since its founding in 2007, the poll showed.
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