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Silvio Berlusconi Withdraws Support, Leaves Italy Without Working Government

ROME -- Italy was without an official government Monday morning after an unpredictable series of weekend developments that culminated with Silvio Berlusconi, Italy's billionaire media tycoon and former prime minister turned political provocateur, ordering five ministers to quit their jobs.

Ostensibly, Berlusconi withdrew his support for the government of Enrico Letta because the government so far failed to pass a package of economic reforms Berlusconi favored. Il Giornale, the Milan daily newspaper run by Berlusconi's brother, Paolo Berlusconi, made that point in Monday's edition, running a banner headline reading "Letta brings the government down." News updates on the three channels on Mediaset, the television and cinema giant Berlusconi controls, made similar statements.

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But most other media and political analysts said the decision was related to the upcoming parliamentary vote on whether to strip Berlusconi of his Senate seat after Italy's Supreme Court upheld a lower court conviction for tax fraud and false accounting. Ever since debate on that topic began nearly a month ago, Berlusconi allies threatened to bring the government down if their leader lost his seat.

The vote on the political future of the three-time prime minister had been scheduled to take place Friday. But under the circumstances it will almost surely be delayed, if it takes place at all.

For his part, Letta has said he will call for a confidence vote, which appears likely to take place Wednesday. Without Berlusconi's support, Letta's chances of winning that vote would at first appear very slim. If Letta loses that vote he would be forced to step down.

But cracks are now appearing in Berlusconi's coalition that give hope some of his allies might defect and support Letta. Of the five ministers who officially resigned Monday four did so saying they disagreed with the general direction Berlusconi's party was taking.

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If Berlusconi's coalition does fracture, with part of it supporting Letta, it would be a significant blow to the cornerstone of the political strength for Berlusconi, who turned 77 on Sunday. Even so, if the Letta government falls it would likely force new elections, which could spark another political comeback attempt for the billionaire.

The developments sent the already troubled economy reeling: the yields on Italian bonds rose by 25 basis points, increasing the country's borrowing costs, and in mid-day trading the blue-chip index on the Italian Stock Exchange had dropped 2.5 percent on fears that the political crisis would further deepen.

Berlusconi's own Mediaset was not spared: the shares were trading at €3.02 ($4.05), down 4 percent, and early in the session they dipped below the €3.00 level for the first time since early July. The shares had been among the best performers on the Italian Stock Exchange this year, but they have now lost more than 15 percent of their value since September 16, when the latest crisis began.  

Twitter: @EricJLyman