RENEE MONTAGNE, HOST:
Turns out it's one thing for Italy's prime minister to live a scandalous private life, it's another to do that during a major economic crisis. Silvio Berlusconi is fighting for the survival of his center-right government and he faces growing discontent within his own party over his lifestyle and judicial woes. Berlusconi's called today for a vote of confidence in Italy's parliament. That vote is expected tomorrow. And as NPR's Sylvia Poggioli reports, Berlusconi's political test comes as Italy is engulfed in the eurozone debt crisis.
SYLVIA POGGIOLI, BYLINE: The confidence vote was triggered by the government's embarrassing defeat Tuesday on a vote to approve government spending this year. An angry Berlusconi rushed out of the chamber as opposition lawmakers shouted demands that he resign, a suggestion he has repeatedly and disdainfully dismissed.
PRIME MINISTER SILVIO BERLUSCONI: (Through translator) To continue as prime minister during this global economic crisis is a great personal sacrifice, a burden I would happily do without. However, a government crisis at this time is the last thing Italy needs.
POGGIOLI: Italy is not in as bad a situation as Greece, but its debt has reached 120 percent of GDP. Growth is at .3 percent and has been stagnant for a decade. The country is spiraling into recession. Its reputation has been severely damaged by Berlusconi's personal scandals. He's facing three trials on charges of tax fraud, corruption and paying for sex with a minor. Business reporter Stefano Feltri says the prime minister has become a liability.
STEFANO FELTRI: Signor Berlusconi spends more time in the court or trying to escape from court to be a real prime minister. Berlusconi is one of the reasons why financial markets don't trust Italy, because they say that he's doing nothing and he's not understanding the crisis.
POGGIOLI: Pressed by the European Central Bank in July, the government grudgingly passed several austerity measures, but it has yet to carry through structural reforms that Berlusconi had promised years ago. And it's been deadlocked over a growth stimulus bill. There are divisions within the coalition over Berlusconi's push for a tax amnesty and an amnesty on illegal construction, laws many commentators say reward illegality. Meanwhile, anti-government demonstrations have erupted throughout the country.
UNIDENTIFIED MAN: (Italian spoken)
POGGIOLI: A few thousand mostly young people gathered in Rome yesterday shouting slogans against the political establishment. They denounced what they call unfair austerity measures and called for the right to default on the debt. Political analyst Giulietto Chiesa says Italians are no longer willing to make sacrifices for policies they do not understand.
GIULIETTO CHIESA: I believe this is a real turning point and the discontent of the people will not be stopped now. The debt is not to be paid, and I believe there is a majority of Italians who agree with this proposal not to pay this debt.
POGGIOLI: But Mario Draghi, who takes over as president of the European Central Bank next month, says the government's fiscal measures are not enough. In his last speech as governor of the Bank of Italy, Draghi said Italy risks entering an ungovernable debt spiral.
MARIO DRAGHI: (Through translator) The rescue and relaunching of the economy can be achieved only by Italians. It's an old Italian shortcoming to hope a foreign army from across the Alps will resolve our problems. As before in our history, that cannot be.
POGGIOLI: But political tensions are growing. The opposition parties are convinced Berlusconi cannot lead the country in this time of economic and social upheaval. They've decided to walk out of parliament today in protest. Sylvia Poggioli, NPR News, Rome. Transcript provided by NPR, Copyright NPR.
