Tax Row Contributes To Berlusconi Exit

by Ulrika Lomas, Tax-News.com, Brussels

22 April 2005

The row over a controversial tax cut package and the coalition government's plummeting popularity have combined to force Italian Prime Minister, Silvio Berlusconi to step down.

The announcement was made on Wednesday, following a meeting with President Carlo Azeglio Ciampi. However, observers have predicted that Mr Berlusconi's absence from the political centre stage will be a temporary one.

According to reports, President Ciampi has asked Berlusconi and his cabinet to stay in office until their replacements can be appointed, although no new laws can be initiated during this interim period.

Speaking to the EU Observers news service on Wednesday, an unnamed government source predicted that Berlusconi will be reappointed after consultation with the heads of the Italian Parliament.

"In theory, he (President Ciampi) could refuse to reappoint Mr Berlusconi. But pragmatically speaking, he will choose the person with a parliamentary majority, which is Mr Berlusconi," the source explained.

It is not known whether the events of this week will force the (currently) former Italian Prime Minister to abandon his flagship tax cut package if reappointed, or whether he will force a confidence vote in order to ensure that the measures are passed.

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