Letta May Save Government by Splitting Berlusconi Party

Italian Prime Minister Enrico Letta headed toward victory in a confidence vote today as some lawmakers from rival Silvio Berlusconi’s party said they’d support his government.

“I’m asking Parliament for courage and confidence,” the 47-year-old premier said today in a speech to the Senate in Rome. New elections would make Italy ungovernable and probably reproduce a stalemate, he said before a vote scheduled for about 2 p.m. local time.

Carlo Giovanardi, a lawmaker from Berlusconi’s People of Liberty party in the Senate, said Letta will win the confidence measure with at least 22 senators from his PDL party breaking away and supporting his government. Earlier, another senator from the PDL, Altero Matteoli, cast doubt on Letta’s victory when he said that Berlusconi loyalists will vote “no.”

Italian bonds rose on optimism that the worst may be over for a political crisis that has gripped the country for the past five days. The yield on the 10-year government bond fell 4 basis point to 4.37 percent, as the the benchmark FTSE MIB Index of stocks rose 1 percent.

Underscoring the split in Berlusconi’s bloc, deputy premier Angelino Alfano, a leader of his People of Liberty party, sat to Letta’s left during the address. The turning point in the political battle came late yesterday when Alfano, who quit the Cabinet on Sept. 28 at Berlusconi’s request, said he will back the government.

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