Italy's beleaguered Prime Minister Silvio Berlusconi on Wednesday addressed Italy's parliament in the wake of a razor-thin victory in a no-confidence vote and vowed to serve out the remaining 30 months of his term of office. But despite the victory, the odds remain stacked against the 74-year- old leader.
Berlusconi's coalition on Tuesday mustered 317 votes in the 630-member chamber, barely giving him the majority he needed to hold onto power. If Berlusconi had been defeated, he would have been required to step down from office.
The vote came at the worst of times for Berlusconi, who in recent weeks had suffered a series of electoral setbacks in two rounds of nationwide mayoral votes, and who on Sunday gave into a basket of controversial demands from his most important remaining coalition partner to keep him from pulling his support and triggering a government collapse.
Berlusconi is also under investigation in three open court cases, and has suffered from the defections of key allies, a weak economy, and deteriorating approval levels.
So far, Berlusconi's concessions to coalition partner Umberto Bossi have not garnered much attention in Italy: the two men agreed Sunday to lower taxes, pull out from the military coalition operating in Libya by September, and to further decentralize government decision-making powers.
It's the tax decision that may come back to haunt Berlusconi's coalition. The government's own Minister of Finance criticized the move, and economists said lowering taxes would balloon Italy' s debt, increase the price of government bonds, and put Italy on the precipice of entering into an economic crisis along the lines of the one that has gripped Greece and Ireland.
Even before the tax cut, Italy's public debt was worth 120 percent of the country's gross domestic product, the highest level in the European Union, and government tax revenue had fallen for five consecutive years.
"There is a real risk of any significant tax cuts creating problems in Italy's already troubled public accounts," Javier Noriega, chief economist with Milan investment bankers Hildebrandt and Ferrar, told Xinhua.
"It remains to be seen how large the tax cuts will be, and whether there will be any offsets from government spending. But whatever the answers to those questions are, it's clear that this is a time to be paying off the government's debt and not adding to it."
Even if the fiscal problems stemming from the tax cuts do not materialize, Bossi remains a wildcard. The head of the separatist Northern league party, Bossi's sudden departure caused the collapse of Berlusconi's first government back in 1994, and since then he has been far from a reliable coalition partner.
The defection of other key members of Berlusconi's historical coalition partners have only increased the controversial Bossi's influence in the coalition, and he has not been shy about using it to further his agenda.
Despite a long series of moves to shift more government power from Rome to the regional and local levels, Bossi wants that to continue. Bossi says he would also like to see the size of government reduced, for it to be harder for immigrants to make a home in Italy, and for the country's international obligations to be kept to a minimum.
What is not yet clear is how much of that agenda the government can promote without putting its own survival in jeopardy.