* PM Letta eyes support from centre-right rebels in
* Berlusconi lashes out at "traitors"
* Letta needs handful of Senate seats for new majority
By James Mackenzie
ROME, Sept 30 Silvio Berlusconi's bid to push
Italy into new elections faces a test on Monday when he meets
lawmakers from his centre-right party who have shown growing
unease over his shock decision to pull support from Prime
Minister Enrico Letta's coalition.
Berlusconi's decision to order the five ministers from his
People of Freedom (PDL) party to resign from Letta's cabinet has
plunged Italy into political chaos and left the euro zone's
third-largest economy without a functioning government.
Financial markets, which have been increasingly nervous
about Italy after a week of rising political tensions, are
expected to sell off government bonds and stocks on Monday,
adding to the atmosphere of crisis.
Letta will go before parliament to seek support to continue
in a confidence vote, probably on Wednesday, leaving two days of
manoeuvering among the parties, starting with a meeting between
Berlusconi and PDL parliamentarians on Monday afternoon.
The billionaire media tycoon, who is fighting moves to expel
him from parliament following his conviction for tax fraud last
month, said at the weekend he wanted elections as soon as
But he faces resistance not just from President Giorgio
Napolitano, who would have to order parliament to be dissolved,
but also from his own increasingly fractious supporters, some of
whom may switch allegiance and back Letta's government.
All five of the ministers ordered to resign on Saturday
complied but made statements expressing reservations or even
outright disagreement with the decision, prompting Letta to hope
that he may be able to win over centre-right dissenters.
Speaking on RAI state television late on Sunday, he said the
PDL ministers appeared to be at odds with Berlusconi and the
parliamentary party, split between hardline "hawks" and more
moderate "doves" also seemed uncertain.
"I hope that there is a part of the PDL which is not in
accord with Berlusconi," he said.
Letta enjoys a commanding majority in the lower house but
would need to win over a couple of dozen senators from the PDL
or opposition parties including the anti-establishment 5-Star
Movement to be able to be sure of parliamentary support.
Letta's unwieldy coalition government of traditional rivals
from the left and right has struggled ever since it was formed
after last February's deadlocked elections which left no party
with the numbers in parliament to govern alone.
But with opinion polls roughly balanced between Letta's
centre-left Democratic Party and the PDL there is no enthusiasm
for a return to the polls under the current voting system, which
most analysts believe would simply produce more stalemate.
Berlusconi's conviction for tax fraud and subsequent moves
to strip him of his seat in the Senate have exacerbated the
tensions, which came to a head last week when PDL
parliamentarians threatened to resign over his legal battle.
A special Senate committee meeting on Oct. 4 is expected to
vote to open proceedings that could lead to Berlusconi being
thrown out of parliament by mid-October.
The former premier, who celebrated his 77th birthday on
Sunday, brushed off talk of breakaways from the PDL and told a
programme on his own Italia Uno channel that he did not believe
that a government backed by "traitors" could survive.
"We'll decide our line tomorrow and I don't believe anyone
or anything will divide us," he said.
With Italy falling behind in its efforts to bring the budget
deficit under European Union limits and youth unemployment
running at nearly 40 percent, the prolonged wrangling between
the parties has blocked efforts to reform the economy, after two
years of recession.
On Friday, cabinet unity collapsed after ministers failed to
agree on a vital package of budget measures to cut the deficit
below the EU limit of 3 percent of gross domestic product and
fund measures to halt an increase in sales tax to 22 percent
from 21 percent.
Berlusconi seized on the sales tax issue to pull out of the
government, saying Letta had reneged on a deal to prevent the
increase from coming into effect, a charge the prime minister
described on Saturday as a "huge lie".