MercoPress. South Atlantic News Agency

Silvio Berlusconi’s fate has the Italian coalition (and economy) on the edge

The former PM party questions support for the coalition if Berlusconi is expelled

Silvio Berlusconi continues to prevail in Italian politics as a close ally warned on Monday that his party could pull out of Prime Minister Enrico Letta's government if a Senate committee refuses to delay a decision on whether to expel the media mogul from parliament.

The cross-party committee, which must vote on whether 76-year-old Berlusconi can remain a lawmaker after being convicted last month of tax fraud, has raised fresh tensions within Letta's left-right arch coalition.

The committee's first meeting on Monday saw a day of tactical skirmishing as Berlusconi's centre-right People of Freedom party (PDL) sought to put off a decision on their leader's political future pending an appeal to the European Court of Human Rights.

However, members from the centre-left and the anti-establishment 5-Star Movement have rejected the call, which could delay a decision on Berlusconi's future by months, and are expected to overrule the PDL and press on with the hearing.

Renato Schifani, PDL floor leader in the Senate, said the attitude was “unacceptable” and risked precipitating a crisis when they meet again on Tuesday evening.

“The signals coming out of the committee point to a brick wall,” he told Italian television. “If that's what happens I don't think we can talk about there being a majority backing the government,” he said.

The committee is dominated by adversaries of Berlusconi from Letta's Democratic Party (PD) and the 5-Star Movement, with at least 14 members of the 23-strong panel ranged against the billionaire tycoon.

Berlusconi could not be expelled without a full vote on the floor of the upper house, but his party has repeatedly threatened to bring down Letta's coalition, potentially triggering new elections, if the PD votes against him.

Financial markets have been increasingly on edge as political tensions escalated, pushing up government borrowing costs ahead of Thursday's auction of medium-term bonds.

With Italy struggling with a 2-trillion euro public debt and mired in its longest recession since World War Two, business leaders have warned that political turmoil could snuff out the first glimmers of a turnaround.

The PD and PDL have been at odds ever since they were forced into an unwilling coalition following weeks of wrangling in the wake of last February's deadlocked parliamentary elections which left no side able to govern alone.

However, they have overcome apparently unbridgeable differences before, notably in last month's deal to scrap a deeply unpopular housing tax despite disagreement over how to fill a 4-billion euro annual funding gap.

Berlusconi's lawyers, who have appealed to the European Court of Human Rights, argue that the “Severino law” under which convicted politicians are ineligible for parliament, cannot apply in his case because it was passed last year, after the events for which he was convicted.

The PD has always rejected calls for the committee to delay proceedings until the European Court or Italy's own constitutional court rules on the Severino law, accusing the PDL of trying to waste time with groundless appeals.