Door open for Berlusconi

Gov't in flux as Italy PM resigns

Stung by a humiliating Senate defeat on his foreign policy plans, Italian Prime Minister Romano Prodi resigned Wednesday, crumbling Italy's 61st government since World War II and creating the possibility — however slight — that billionaire media tycoon Silvio Berlusconi could return to power.

Prodi defeated Berlusconi by a razor-thin margin in April, and the narrow one-person Senate majority he earned came back to haunt him Wednesday when three defections from his party left him two votes shy of the majority he needed for a confidence vote on Italy's peacekeeping role in Afghanistan.

Although the constitution does not require Prodi to resign under those circumstances, Foreign Minister Massimo D'Alema — himself a two-time prime minister and a potential candidate to succeed Prodi — said before the vote that the government should step down if it failed to win enough support in the Senate.

Although the most likely scenario is that Prodi or another member of his coalition will be asked to form a government, a failure there could open the door to Berlusconi or another opposition figure to step in. With Prodi's approval levels hovering in the mid-30s, new elections could also hand power to Berlusconi's allies.

Meanwhile, Fininvest, the holding company that controls broadcasting giant Mediaset, on Tuesday was raided by police to gather evidence for a fraud case against Berlusconi, who controls both companies.

Magistrates acknowledged Wednesday that the raid took place but did not say what law enforcement officers were seeking, saying only that they were gathering evidence for a case that had not yet seen trial.

Berlusconi and 11 others are set to face charges of fraud, tax evasion, false accounting and misappropriation of funds in a trial set to restart March 13 after four delays since November.

In addition to Berlusconi, those facing charges include British lawyer David Mills, the estranged husband of British culture secretary Tessa Jowell. Court documents allege that Berlusconi paid Mills to lie for him on whether he used illegal accounting methods to pocket millions in royalties for films to which Mediaset owned the rights.

Prodi submitted his letter of resignation to President Giorgio Napolitano late Wednesday, leaving it to Napolitano to announce today whether he will ask Prodi — or someone else — to form a new government. Napolitano could also call new elections or form a coalition from both sides of the political aisle.

The last time an Italian prime minister resigned, it was Berlusconi, who silenced infighting in his coalition by stepping down in April 2005, then formed a new, wider-reaching government a day later. With the widening cracks in his coalition, it will be harder for Prodi to re-form a government so quickly.

If Prodi fails to take control again, the fate of several media reforms he launched will be cast in doubt. Among them is a wide-ranging reform that would cap the percentage of the total ad market a single broadcaster can hold. Another requires both Berlusconi's Mediaset and state broadcaster RAI to switch one network each to 100% digital technologies by 2009, and a third would change two RAI networks into nonprofit companies that would accept no advertising.
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