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Berlusconi Distances Himself From Letta as Party Splits

Oct. 25 (Bloomberg) -- Former Italian Prime Minister Silvio Berlusconi distanced himself from the government he helped form in April by rallying his most loyal allies into a new political party.

The 77-year-old billionaire’s People of Liberty party decided to suspend operations in order to start the new movement which will be called Forza Italia, Berlusconi said at a press conference in Rome broadcast on SkyTG24. The decision splits the party in two as Deputy Prime Minister Angelino Alfano, its general secretary and its strongest voice in support of the government, refused to attend.

Berlusconi is seeking to impose his authority over a smaller group of lawmakers after losing control of People of Liberty, or PDL, this month in a failed attempt to topple Prime Minister Enrico Letta. Berlusconi will head the reborn Forza Italia, which is the name of the party he created when he entered politics in 1993.

The new movement will keep supporting Letta if his Cabinet keeps cutting taxes and spending, Berlusconi said, reading a statement. The government relies on PDL votes for support in parliament.

Three-party Coalition

“The creation of a splinter political group from the PDL/Forza Italia would not significantly increase the risk of a possible downfall by Letta’s government,” Wolfango Piccoli, a London-based analyst with Teneo Intelligence, said today in a research note. “To the contrary, the emergence of a centrist political formation composed by dovish figures from Berlusconi’s party could provide the government with a more reliable support.”

Letta, 47, came to power by stitching together a three-party coalition after February elections failed to yield a force strong enough to govern alone. The PDL is the second-biggest group behind Letta’s Democratic Party.

Berlusconi became an increasingly unreliable backer for the government in recent months as his legal troubles intensified. Berlusconi, now a senator, is facing expulsion proceedings in the upper house after the Supreme Court upheld his conviction for tax fraud on Aug. 1. His push to bring down the government failed when Alfano secured enough PDL dissidents to ensure Letta victory in an Oct. 2 confidence vote.

To contact the reporter on this story: Andrew Frye in Rome at

To contact the editor responsible for this story: James Hertling at

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