UPDATE 1-Berlusconi loses libel suit against The Economist
(Adds Berlusconi lawyer reaction paragraphs 6-9)
By Phil Stewart
ROME, Sept 5 (Reuters) - Prime Minister Silvio Berlusconi lost a defamation suit he brought against The Economist over a 2001 cover story that accused him of being "unfit to lead Italy", the British news magazine said on Friday.
Berlusconi, one of Italy's richest men, was ordered to pay The Economist's legal costs of 25,000 euros ($35,760) after a Milan court rejected his libel claims.
The Economist's April 26, 2001, edition ran a front page photo of the media mogul with the headline: "Why Silvio Berlusconi is unfit to lead Italy".
It accused him of having conflicts of interest, analysed his business empire and detailed trials against him, in an issue which came out just ahead of elections that Berlusconi won.
"They (The Economist's arguments) fully fall within the right to criticise, which is guaranteed by Article 21 of the constitution," Milan Judge Angelo Ricciardi wrote, in a copy of the ruling.
Berlusconi's attorney said he would lodge an immediate appeal.
"The Milan court is, in fact, mistaken in ruling lawful an article which in reality should have been considered offensive to the Honourable Berlusconi and was peppered with unfounded assertions," Fabio Lepri said in a statement.
"It is not by chance that the words of the Economist periodical, published shortly before the 2001 elections, have been disproved many times by the votes of the Italian people."
The Economist, which published the court ruling on its website, said it was pleased and would make no further comment.
The judgement will do nothing to soften the conservative billionaire's frequent criticism of both the media and Italian judges, who he claims have unfairly targeted him since he entered politics in the early 1990s.
The Economist has repeatedly launched broadsides against Berlusconi, whose business empire spans television, publishing, film and top flight soccer team A.C. Milan.
Just before he narrowly lost his bid for re-election in 2006, the magazine ran a cover story saying "Basta, Berlusconi" ("Enough, Berlusconi"). When snap polls approached in April 2008, it told voters Berlusconi was "still unfit" to lead Italy.
The magazine accused the conservative billionaire in July of using his third term as prime minister largely to pursue his "personal and corporate interests".
The headline was "Berlusconi fiddles, Italy burns" and displayed a caricature of him in the likeliness of Roman emperor Nero.
"There is no hint of debate on the liberalising measures that Italy's hidebound economy badly needs," it wrote.
Italy's economy shrank by 0.3 percent in the second quarter of the year compared with the first, and Economy Minister Giulio Tremonti has said growth will be "around zero" in 2008, underperforming the euro zone average. (Editing by Marie-Louise Gumuchian and Mary Gabriel)
