Berlusconi Turmoil in Italy Poses Threat to Euro-Crisis Lull

Italian government instability following the tax-fraud conviction of former Prime Minister Silvio Berlusconi threatens to end a lull in the European debt crisis and derail a nascent economic recovery.

Berlusconi’s party has rallied around its leader, possibly seeking a presidential pardon and threatening a mass resignation of deputies in parliament, a move that could bring down Prime Minister Enrico Letta’s government. Letta has told allies that he would quit before being pushed out if support dwindles, Italian daily la Repubblica reported on Aug. 3.