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Italian economic problems now in focus as Berlusconi faces confidence vote

Italian Prime Minister Silvio Berlusconi at the G20 summit in Cannes, France on Nov. 4, 2011. AP/Michel Euler

Italians woke to yet another strike on Monday as transport unions in Rome shut down bus, tram and metro lines in the capital.
        
Commuters were stranded at bus stops and tempers flared with the growing feeling the government was not dealing with the country’s problems.

Bus and metro drivers are protesting low pay and government cuts to the transport system.

Some commuters caught up in the strike said it was time Prime Minister Silvio Berlusconi stepped aside, as Greek counterpart George Papandreou has promised, in order for the country to get back on track. But Berlusconi still holds strong support from large swathes of Italian society.

“Berlusconi needs to continue doing what he is doing, because I think everyone else is the same as him,” said commuter Raffaele Zani referring to the other politicians.

“He needs to continue moving forward like this and the others need to help this government because it is a moment of crisis. As they say ‘unity makes strength’ and we shouldn’t be throwing mud at each other—they need to be helping each other,” Zani added.

Newspaper headlines ran with Berlusconi’s scramble to gain enough support to win a confidence vote in parliament on Tuesday.
        
“There is no majority any more” ran one headline.

Others led with the words from the Interior Minister Roberto Maroni. “Maroni: it is useless insisting, it’s finished.”
        
But many Italians still support their prime minister and want him to remain in power.
        
“Berlusconi needs to keep going,” said Margarita Tizzi.

Others think it is time to move towards a technical government.
        
“I think we should have either a technical government or fresh elections because we can not go ahead like this—this is no way to govern the country,” said Giuseppe, a student.
        
“I do not love Berlusconi and I want him to go as soon as possible but the problem is that elections now would probably be a disaster for Italy,” said Rome resident Brisca Bettini.
        
“But I don’t think they will be able to come to agreement on any kind of technical government which would be ideal for a while in order to put forward the reforms the EU want to see and to reform the electoral system,” she added.
       
Markets reacted negatively to the instability in Italy on Monday with the spread of Italian 10-year yields over their equivalent German bonds hitting a new euro lifetime high at 480 basis points.
        
Italy’s 10-year BTP government bond yields rose to a record 6.58 percent, data shows, higher than when the European Central Bank started purchasing Italian and Spanish bonds to lower their borrowing costs.
        
Berlusconi has one day left to win over waverers and see off a group of party rebels threatening to bring down his government in a backlash over its failure to adopt reforms to defuse a dangerous debt crisis.
        
Estimates vary widely over how many centre-right deputies will jump ship in a crunch vote on public finance in the Chamber of Deputies (parliament) on Tuesday.
    
Berlusconi’s message to potential “traitors” is clear: you have nowhere else to go and you will be rewarded if you stay.