Berlusconi to Resign, Re-Form Government

Prime Minister Silvio Berlusconi forged a deal in two hours of talks with Marco Follini, leader of the rebel Christian Democrat UDC who pulled his ministers out of the four-year-old government last Friday. He then formalized the agreement in a meeting with the other three party leaders in his coalition, Deputy Prime Minister Gianfranco Fini told journalists.

"We have called for a sign of change. It seems to me we're going in that direction," Follini said in a statement released by his party. "A new government is not a victory for us, but an opportunity for the whole government, an opportunity to cultivate," he said.

Berlusconi left his official residence shortly after 6:20 p.m. CET to travel the short distance to the Quirinale Palace where he was expected to formally offer his resignation to President Carlo Azeglio Ciampi (photo). The 84-year-old president was expected to ask him to form a new government.

Threat of elections looms

The 68-year-old prime minister had threatened to call snap elections if Follini and his three ministers choose not to rejoin the fold.

"I'm convinced that it's possible to relaunch the center-right in the shortest possible time," said Fini, leader of the National Alliance party. "It's essential that the hoped-for change in the program and in the government team happens in an incisive and balanced way," added Fini.

Follini, who is also a deputy prime minister, led his ministers out of the center-right government Friday after Berlusconi offered only minimal changes in the wake of a resounding defeat in regional elections early this month. The UDC had called for a broad revamp of his policies.

Berlusconi is now expected to reshuffle his government line-up substantially, introducing several new ministers, and give new impetus to the industry-deprived south of the country -- one of the UDC's key demands. A new government program is also expected to boost the competitiveness of the country's industry and support large families through a new tax regime. The prime minister, whose own Forza Italia party is Italy's biggest, will have to balance the centrist party's demands with those of the Northern League, which has its power base in industrialized Piedmont and Lombardy in the north.

Italians opposed to vote

Failing an accord on Monday, Italy could have faced elections within the 45 to 70 days laid down in the constitution. Political commentators said the most likely date for an election would be in June. Former Prime Minister Romano Prodi, who rallied the center-left under the banner of the Union umbrella group to achieve a major victory in this month's polls, had pushed for an early poll.

Some two-thirds of Italians however are firmly opposed to snap elections, according to a survey of 1,600 people carried out by the daily Corriere della Sera last week.

The coalition lost six of eight regions it controlled prior to the April 3-4 regional elections, which many saw as a dress rehearsal for a parliamentary vote slated for next year. Follini said late last week that voters had signaled they wanted "profound change" and his party could not pretend that "nothing happened." "Leaving things as they are would help neither the coalition nor the country," he said.

Berlusconi, whose mandate runs out in May 2006, survived six votes of confidence last year.