Berlusconi offers 'pact' with foes ahead of vote

Italian prime minister offers to strike a deal with his opponents on the eve of a crucial confidence vote that may end his political career.

ROME // Italian Prime Minister Silvio Berlusconi Monday offered to strike a deal with his centre-right opponents on the eve of a crucial confidence vote, warning a political crisis would be "folly."

"I want to reconstitute the alliance of all the moderate forces that were at the origin of our political engagement," Berlusconi said in a speech to the Senate, the upper house of parliament, ahead of Tuesday's vote.

He proposed a new "legislative pact" with the opposition Union of the Centre (UDC) party and the allies of speaker of parliament Gianfranco Fini, whose break with the ruling coalition caused the current political impasse.

UDC politicians, however, dismissed Berlusconi's offer, saying the prime minister should first resign and then there could be talks on a new alliance.

"If Berlusconi believes in uniting the moderates, he should resign before the confidence vote," UDC party leader Pier Ferdinando Casini said.

"He always thinks that everyone else is at fault," he added.

Fini ally Adolfo Urso, a member of parliament, said: "Let him give up his mandate without waiting for tomorrow's confidence vote."

Berlusconi faces a knife-edge vote in the lower house of parliament that could either lead to the collapse of his government or see the resilient Italian leader, who first won elections in 1994, bounce back once again.

"I ask you... to reflect on the political folly that opening a crisis without visible and credible solutions would be today," he said, emphasising that the "losers" of elections should not be allowed to topple the government.

"Our country is being shaken by serious tensions that concern the heart of the economic system--the financial credibility of the state," he added.

"The prospects for stability and the hopes for growth of the economic and financial system depend on the confidence votes," he continued.

There will be confidence votes in the both the Senate and the Chamber of Deputies starting at around 0800 GMT on Tuesday but the attention is mainly on the vote in the lower house, where Berlusconi's support is seen as weaker.

If he loses either vote, Berlusconi will be forced to offer his resignation.

Analysts say the vote is just too close to call but even if he wins with a paper-thin majority, Italy may have to hold elections before the government's mandate runs out in 2013 in order to prevent a paralysis in parliament.

The contest is so tight that even President Giorgio Napolitano--who is expected to play an important role in any political deal-making after the vote--said "a crystal ball" would be needed to predict the outcome.

The 74-year-old media tycoon burst onto Italy's corruption-ridden political scene with an election win in 1994 and has gone on to win two other votes in 2001 and 2008 and serve the longest term as prime minister in post-war Italy.

He has become a figure of ridicule on the international stage--famous for his gaffes, off-color jokes and sexual escapades--but is still seen as a powerful player in Italy and supporters say it is too early to write him off.

The political instability in a major euro-zone economy has so far had little effect on financial markets used to Italian government turbulence despite Italy's high level of public debt--the third highest in the world.

Italy's public debt is forecast to reach 118.5 per cent of gross domestic product this year--by far the highest level in the euro zone.

Italy's main stock market index--the FTSE Mib--was up 0.88 per cent after Berlusconi's speech.

Tens of thousands of protesters from the main opposition Democratic Party marched in Rome on Saturday to demand a change of government and further protests are expected in the Italian capital on Tuesday.

"The record of these last years is disastrous. Our country had not improved at all. We have been left behind by the strong countries of Europe," Democratic Party leader Pier Luigi Bersani told the crowd on Saturday.