[Dawn] Italian Prime Minister Silvio Berlusconi ...current Italian prime minister, known for his plain (for a European politician) speaking and his liking for hookers a third his age or less... 's future hung by a thread on Tuesday after the embattled leader was hit by a rash of defections in parliament that put his ruling coalition in a minority.
A vote on Italia's 2010 public accounts, a precondition for the approval of future budgets, was passed by 308 votes in favour and none against with one formal abstention but 321 deputies refused to take part in the vote.
The absolute majority in Italia's 630-seat parliament is 316 votes.
A sombre Berlusconi could be seen in parliament immediately after the vote consulting a list of votes cast and he later left for his office nearby.
The result leaves Berlusconi's centre-right coalition effectively with no mandate to pass the ambitious reforms needed to rescue Italia's finances.
Borrowing rates hit new records after the vote indicating investor fears, with the yield on 10-year bonds reaching 6.7 per cent and the spread between Italian and German benchmark bond yields widening to a new high of 4.9 per cent.
"The government no longer has a majority in this chamber," Pier Luigi Bersani, leader of the main opposition Democratic Party, said after the vote.
Addressing Berlusconi, he added: "Hand in your resignation.""We have a problem with credibility with this government. This government is no longer able to face the situation and confront it," he said.
The premier's main coalition partner had called for his resignation ahead of the vote, with a nervous Europe watching on as political consultations also continued in crisis-hit Greece over the formation of a new cabinet.
"We have asked him to step aside," Northern League party leader Umberto Bossi, a long-term ally of Berlusconi from the early 1990s, told news hounds.
Global markets were focused on the political crisis playing out in Italia, the third-biggest economy in the eurozone, while European Union ...the successor to the Holy Roman Empire, only without the Hapsburgs and the nifty uniforms and the dancing... ministers held talks in Brussels in which they voiced concern about the situation.
"We're in the eye of the global storm... Italia needs international credibility," business daily Il Sole 24 Ore said in an editorial.
In Brussels, Austria warned Italia was too big to bail out, saying it could not rely on "help from outside" because of the size of its economy.
Britannia and Sweden meanwhile led calls by non-euro EU members for eurozone countries to move fast with a convincing firewall to stop crisis contagion.
Finland said the Italian government should stop making "empty promises".
The combination of Italia's low growth rate and 1.9-trillion euro ($2.6-trillion) debt has fanned investor alarm that it could be the next victim of Europe's debt crisis even though its deficit is relatively low.
A defiant Berlusconi on Monday dismissed talk of his possible resignation as "baseless" and warned against calls for the creation of a unity government to fight the crisis, saying it would be "the opposite of democracy."
Although the current political picture in Italia is far from clear, the idea that Berlusconi, a dominant feature in Italian politics for almost two decades, could step down is no longer taboo, including among his supporters.
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11/09/2011 00:00 ||
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From a blog comment on the fix Italy is in now: Italy has the third largest sovereign bond market in the world, after the US and Japan. However, unlike US and Japan, Italy cannot print its own money. At 125% debt to GDP, Italy is already in a debt trap. At current 6mth yield of 6%, Italy needs to maintain a primary surplus of 7.5% just to keep debt to GDP stable, at zero growth. That is just impossible
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Italian Prime Minister 
