ROME, Oct. 2 (Xinhua) -- In a stunning reversal, former Italian Prime Minister Silvio Berlusconi Wednesday announced he would support the government of Enrico Letta, avoiding a vote that could have deepened Italy's government crisis.
Berlusconi and his allies form the second largest bloc in the grand coalition supporting the Letta government, and an en masse departure from the government would have no doubt caused the government to crumble.
But as Wednesday's confidence vote drew close, the chances that Letta might survive the pivotal vote appeared to be growing due to reports that at least two dozen members of the Berlusconi camp were ready to defect.
On Monday, Berlusconi sparked the crisis by ordering five ministers from his party to quit. They obliged, but four did so after stating their opposition to the decision.
That caused Letta to call for the confidence vote: a loss would have forced Letta to step down, but if he survived many analysts said it would have illustrated the extent to which Berlusconi's political muscle had eroded.
"This was shaping up to be like a showdown in an old western film," said Gianfranco Gallo, a political risk analyst with Hildebrandt and Ferrar in Milan. "Instead, one side didn't show up, which could be a problem. Because the differences between the two camps haven't been addressed."
It is not clear what made Berlusconi change his mind Wednesday. Speculation in the Italian press runs from his switching sides after it became apparent Letta would survive the vote to a backroom deal in which Berlusconi obtained some key concession from Letta allies.
For his part, Berlusconi would only say he threw his support behind the Letta government for the good of the country.
"Italy needs a government to pursue institutional and structural reforms, and so we have decided to vote for the confidence motion," Berlusconi said after announcing his support for Letta.
At least in the short term, it worked, as financial markets responded positively. The Italian Stock Exchange in Milan opened lower awaiting the vote but quickly made a U-turn after it became apparent the government would survive, with the blue chip index finishing 0.7 percent higher, and 1.7 percent higher than its lowest point during the day.
Bonds had a similar reaction, with yields on the benchmark 10-year bond reversing a rising trend from recent sessions to see the yield drop 5 basis points to 4.37 percent on secondary markets.
In the medium and long term, however, the picture is less rosy since Wednesday's avoided showdown leaves the situation in the Letta government unchanged from recent weeks, with an increasingly volatile Berlusconi still a key junior partner who could choose to pull his support -- or use the threat to do so -- as a negotiating tactic on measures important to him.
Italy may not have to wait long for the first threat: parliament is schedule to vote Friday on whether or not to strip Berlusconi of his Senate seat.
Though that might now be delayed, and it's doubtful that Berlusconi would try to flex his muscles again so soon after Letta's confidence vote, it's also hard to believe the 77-year-old billionaire's most hard line allies will be pleased if their leader is kicked out of parliament.
ROME, Oct. 2 (Xinhua) -- Italy's troubled government late on Wednesday won the second of two confidence votes from parliament, after Prime Minister Enrico Letta was threatened last week by former premier Silvio Berlusconi who ordered the ministers from his center-right party to resign.
The left-right coalition gained support of the lower chamber with a large majority of 435 yes votes to 162 no votes, hours after the Senate also gave its approval. Full story