Berlusconi Wins Confidence Vote as Riots Erupt in Rome

Italian Prime Minister Silvio Berlusconi survived a confidence vote as student protesters clashed with police, leaving clouds of tear gas and smoke from burning cars wafting over Rome.

Berlusconi, 74, won the motion in the Chamber of Deputies by 314 to 311 today, short of an absolute majority, Speaker Gianfranco Fini said. Fini’s defection from Berlusconi’s People of Liberty party and his call for the premier to quit prompted today’s vote. Berlusconi also carried the Senate and shares of his Mediaset SpA rose to their highest in more than three weeks.

Berlusconi called on defecting lawmakers to return to his fold, saying that the country couldn’t afford political upheaval as Europe’s debt crisis boosts borrowing costs. Without a working majority in the 630-seat lower house, Berlusconi may call early elections, which polls show he would win against a divided opposition.

“He bought some time,” said Roberto D’Alimonte, professor of politics at Luiss University in Rome. “He is still in control. He is still the master. He can choose what suits him best” -- either bringing defectors into his coalition, allying with the centrist UDC party or seeking early elections, he said.

‘It’s quite predictable that some lawmakers, having seen that the attempt to provoke a government crisis has failed, may decide to reenter within the People of Freedom or the government majority,” Berlusconi said in Rome after meeting with President Giorgio Napolitano at his hilltop Quirinale Palace. He said he’s certain he would win any early election.

Set Ablaze

During the voting, authorities blocked access to central Rome as police battled protesters opposed to proposed spending cuts.

The demonstrators hurled bottles and smoke bombs and dumped manure in the street outside Berlusconi’s residence and the Senate before charging barricades. They moved to Piazza del Popolo after the vote, where garbage and police trucks were overturned and set ablaze as firecrackers exploded. Police fired tear gas to disperse the crowds.

More than 40 protesters, including a French citizen, were arrested, the police said in an e-mailed statement. During the riots six police vehicles were damaged and 57 policemen were hurt by protesters, “many of whom wore helmets and carried shields,” the police added. A spokesman for the emergency services said that 40 protesters were slightly injured.

Voting Scuffle

Inside the Chamber of Deputies, Fini was forced to temporarily suspend the vote after a scuffle broke out between lawmakers during the balloting.

Prior to the vote, opposition leaders called on prosecutors to investigate Berlusconi for vote buying -- charges he denied. Three pregnant lawmakers, including one who was due to give birth yesterday and arrived by ambulance, managed to cast their votes against Berlusconi. In the end, three of Fini’s lawmakers switched back to Berlusconi and a fourth abstained, giving the victory to the three-time prime minister who has led the government in eight of the past 10 years.

“The country is the big loser because with just 314 votes you can’t govern and the vote doesn’t resolve the political problems on the center-right,” said Massimo D’Alema, a former prime minister and a lawmaker from the opposition Democratic Party. “All the problems remain and will get worse.”

The yield premium investors demand to hold Italian 10-year bonds over similar-maturing German bunds narrowed after the vote and was little changed at 158.7 basis points at 6 p.m. It more than doubled this year and surged to a euro-era record of 212 basis points on Nov. 30.

Mediaset Gains

Mediaset, the Milan-based media company that helped Berlusconi become one of the world’s richest men with a fortune of $9 billion, erased early losses and gained as much as 5 percent. The stock gained 3.3 percent to 4.64 euros.

Italy has weathered the debt crisis better than Spain, Portugal and Ireland, maintaining the lowest risk premium of the four. Standard & Poor’s, in reaffirming Italy’s A+ credit rating on Nov. 2, said political instability was one of the biggest risks to the country’s creditworthiness. Today’s vote doesn’t end the threat, Fabio Fois, an economist at Barclays Capital in London, said in a note to investors.

“Despite having won the vote, political instability is likely to remain in Italy,” Fois wrote. “Should moderates belonging to Fini’s party not seek involvement in the political activity of the government, Berlusconi will continue to suffer from not having a stable majority.”

Fini Loses

The rift with Fini and renewed allegations of sexual impropriety left Berlusconi’s popularity at the lowest since his 2008 elections, polls indicated.

Still, Fini, who co-founded the ruling party with Berlusconi and an ally since Berlusconi entered politics in 1994, may be the biggest loser. He split with the premier after criticizing him for stifling internal debate and passing laws to favor his personal interest. The two partially reconciled in September, when Fini and about three dozen of his supporters backed Berlusconi in a confidence vote.

Berlusconi’s latest sex-related scandal further strained relations, and Fini called for Berlusconi to resign on Nov. 7, leading to today’s confidence votes. Berlusconi’s popularity dipped after he admitted phoning Milan police to inquire about a 17-year-old nightclub dancer in their custody. The woman, who danced under the stage name of “Ruby heart stealer,” had attended a party at Berlusconi’s Rome mansion and was released by police into the custody of the premier’s former dental hygienist, now a local politician for Berlusconi’s party.

(Updates with statement from Rome police on riots in eighth paragraph.)
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