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Italy's Berlusconi Hands in Resignation, Pledges to Form New Government to Strengthen Coalition
By ALESSANDRA RIZZO
The Associated Press

Apr. 20, 2005 - Premier Silvio Berlusconi handed the president his resignation Wednesday and pledged to form a new government to strengthen his coalition, which has been weakened by a sluggish economy and opposition to Italian involvement in Iraq.

The premier's resignation brings to an end to Italy's longest-serving government since World War II. Berlusconi had been under pressure to resign since a stinging defeat in regional elections earlier this month.

President Carlo Azeglio Ciampi's office said in a statement that Berlusconi had tendered the resignation of his Cabinet, and added the government would stay on as caretaker.

Earlier, Berlusconi had addressed the Senate and told the country of his plan to step down and form a new government and platform.

It is now up to Ciampi to designate a candidate to assemble a new government, or else dissolve parliament and call early elections. Ciampi, who begins formal political consultations Thursday, is expected to give Berlusconi the mandate to form a new Cabinet.

"The regional elections showed a clear sign of discomfort," Berlusconi said in his Senate address. "I want to give an adequate political response."

Government partners "have all demanded a new government, to be based on the same coalition," Berlusconi said. "I accept this challenge."

Berlusconi said he was confident a new government would relaunch the center-right coalition ahead of next year's general election.

Berlusconi has been struggling to hold his 4-year-old government together, and a senior coalition partner threatened Tuesday to quit the government in a further setback for the premier.

The National Alliance party said it would still support the center-right coalition but that the continued participation of its ministers, whose letters of resignation were ready, "depends solely on what Berlusconi will say and do."

The National Alliance is the coalition's second-largest partner after Berlusconi's own party. There was little chance that the government could have survived if the party's five ministers including Foreign Minister Gianfranco Fini had resigned.

Last week, a smaller coalition partner, the Union of Christian Democrats, or UDC, decided to withdraw its three ministers from the Cabinet. The tiny New Italian Socialist Party has also pulled out two lower-level officials.

The political turmoil was triggered by a crushing defeat in the April 3-4 regional elections. Berlusconi's popularity has fallen amid sluggish economic growth and Italy's unpopular military mission in Iraq.

Last year, Italy's economy expanded by 1.2 percent, compared with an average of 2 percent in the entire 12-nation euro zone, and the government is under pressure from the European Union to contain its ballooning deficit.

Berlusconi, a media mogul-turned-politician, passed about $8.6 billion in tax cuts late last year, but the plan almost tore apart his coalition. Many allies insisted the cuts should have been postponed until 2006, saying Italy's huge debt would not allow for them sooner.

A separate plan to further cut taxes by $16.1 billion this year is also controversial: The National Alliance and UDC insist that priority should be given to aiding Italy's underdeveloped south.

The two parties also are unhappy about massive constitutional reform that gives more power to Italy's regions, and which is backed by another government party, the Northern League. The reform is awaiting parliamentary approval.

Opposition parties led by former European Commission president Romano Prodi have been pressing for early elections. Among their complaints are Berlusconi's handling of the economy and his decision to send Italian troops to Iraq following Saddam Hussein's ouster.

Pressure to pull the troops from Iraq mounted recently following the March 4 killing in Baghdad of an Italian intelligence agent who was escorting a released hostage to freedom. The agent was shot by U.S. troops who mistakenly opened fire on his vehicle.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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