Northern League leader Umberto Bossi wants to agree a compromise with lower house speaker Gianfranco Fini who has demanded that Berlusconi resign.
Bossi has been the 74-year-old premier’s sole coalition ally since last July, when, after months of acrimonious exchange, Berlusconi expelled Fini from the People of Freedom (PDL) party they co-founded in 2008.
The break-up prompted Fini to set up his own party, depriving Berlusconi of a guaranteed majority in the lower house of parliament and virtually paralyzing the executive.
Fini demanded last Sunday that Berlusconi resign so that a new center-right coalition including centrists can be formed, raising the chances of a full-blown government crisis that could force early elections.
Berlusconi was due to return from a G20 summit in South Korea on Saturday.
Bruised by a string of sex scandals and with his popularity at a record low, Berlusconi has made it known that he has no intention of stepping down, but most commentators say the countdown to the end of the Berlusconi era has already started.
“In my country right now I have a few problems,” an uncharacteristically understated Berlusconi told his Vietnamese counterpart shortly after arriving in Seoul.
The fact that Berlusconi has tasked the outspoken Bossi with seeking a compromise with Fini shows the growing clout that the Northern League has gained in Berlusconi’s coalition.
Political commentators say Bossi will offer a deal that would see Berlusconi resign only to form a new government, possibly giving Fini’s loyalists more cabinet posts.
Fini, however, is likely to reject that and make good on his threat to pull a minister, a deputy minister and two undersecretaries from Berlusconi’s current executive — effectively bringing things to a head.
Berlusconi could then risk a confidence vote in parliament, forcing Fini to take responsibility for pulling the plug on the government and clearing the way for early elections most analysts expect to take place next spring.
The timing of the crisis is complicated by the need to pass the 2011 budget law, which parliament must approve by year-end.
Failure to do that may rattle markets, which have so far been spared the turmoil that hit Greece, Spain and Ireland.
Italy weathered the financial crisis better than most of its European peers, but it has one of world’s highest deficits and 30 billion euros worth of bonds to roll over in December alone. One possible compromise would be to keep the government afloat until the budget is approved and then head for a final showdown in parliament immediately afterwards.
In any case, an early election is far from certain to bring more stability.
With the divided center-left opposition unable to mount a serious challenge, opinion polls say that Berlusconi is likely to win a new poll, but may not have a majority in the Senate.
The Northern League is the only party that is seen gaining ground, although surveys also point to growing support for a “Third Way” bloc which would group Fini’s movement, centrists and other moderates.
