Italian government about to collapse!
ROME, Italy - October 25, 2011 - Italy’s prime minister was fighting on Tuesday night to stave off a collapse of his center-right coalition government over European Union demands for more concrete economic reform measures, in time for Wednesday’s highly anticipated summit of eurozone leaders.
The demand came as European officials attempted to reach a final agreement on giving the eurozone’s 440 billion euro rescue fund more firepower so that it can assist Italy by purchasing Italian bonds, thus lowering Rome’s borrowing rates, which are near 6%.
While such EU assistance falls well short of a full-scale Italian bailout, senior European officials said it would come with tough new conditions, and that the demands on Silvio Berlusconi were the beginning of a more intrusive effort by Italy’s eurozone partners to ensure that Rome convinces the financial markets it is sincere about fiscal reforms.
Talks early on Tuesday between Berlusconi and his Northern League coalition partners failed to resolve the deadlock - centered on proposed pension reforms - after inconclusive negotiations the night before.
“The government is at risk,” Umberto Bossi, leader of the fiercely eurosceptic and federalist Northern League, told reporters in Rome. “The situation is difficult, very dangerous. This is a dramatic moment,” he said, warning of possible snap elections.