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Italy’s parliamentary elections have ended in stalemate and the possibility of a hung parliament.

With all domestic votes counted, Pier Luigi Bersani’s centre-left bloc has narrowly beaten ex-PM Silvio Berlusconi in the lower house but has failed to secure a majority in the Senate.

Control of both houses is needed to govern and a Berlusconi official said the election was “too close to call”.

A protest movement led by comedian Beppe Grillo won a quarter of the vote.

Meanwhile a bloc led by current Prime Minister Mario Monti came a poor fourth, with about 10%.

The outcome of the election, which comes amid a deep recession and tough austerity measures, was so close that the margin of victory given in interior ministry figures was less than 1% in both houses of parliament.

“It is clear to everyone that a very delicate situation is emerging for the country,” said centre-left leader Pier Luigi Bersani as the last of the votes were being counted.

Angelino Alfano, secretary of former PM Silvio Berlusconi’s People of Freedom party, said the result was “extraordinary”, and he urged the interior ministry to wait before declaring a final result.

The interior ministry figures were not official, he argued, and were “inevitably subject to a margin of error”.

With returns from all polling stations processed, the interior ministry figures gave Pier Luigi Bersani’s centre-left bloc 29.54% of the vote for the lower house (Chamber of Deputies), barely ahead of the 29.18% polled by Silvio Berlusconi’s bloc.

Angelino Alfano said the result was “too close to call” given the tight margin between the two blocs.

Votes cast outside Italy are still to be collected.

Pier Luigi Bersani also won the national vote for the Senate, but was unable to secure the 158 seats required for a majority.

As bonus seats are distributed in the upper house according to regional votes, Silvio Berlusconi’s centre-right bloc was expected to emerge with a higher number of seats.

Italy's parliamentary elections have ended in stalemate and the possibility of a hung parliament

Italy’s parliamentary elections have ended in stalemate and the possibility of a hung parliament

Silvio Berlusconi was heading for victory in three of the four big regions – Lombardy in the north, Campania in the centre, and Sicily in the south.

Initial exit polls on Monday afternoon gave Pier Luigi Bersani’s bloc a clear victory, prompting the Milan stock market to soar by nearly 4%.

But as the close result became clear the markets fell back. In New York, the Dow Jones Industrial Average fell 1.55% and Asian markets lost between 0.7% and 2.2%.

The apparent split between left and right in the eurozone’s third largest economy is likely to cause great anxiety among leaders in other EU member states.

A period of horse-trading will now follow, and the leading blocs will try in turn to form a coalition.

But, with the electorate apparently so divided, many believe a second election will have to follow in a few months.

Silvio Berlusconi, 76, left office in November 2011, facing claims of economic mismanagement as the eurozone struggled to contain Italy’s debt crisis.

Italians have had more than a year of technocratic government under Mario Monti. But his attempts to reduce spending caused widespread public resentment and his decision to head a centrist list in the parliamentary elections attracted little more than 10% of the vote.

“Some supposed we’d get a slightly better result but I am very satisfied, we are very satisfied,” he said.

In a surge in support, Beppe Grillo’s anti-austerity Five Star Movement attracted 25.54% of the vote.

Correspondents say this was an extraordinary success for the Genoese comic, whose tours around the country throughout the election campaign – hurling insults against a discredited political class – resulted in his party performing well in both chambers.

“We’ve started a war of generations,” Beppe Grillo said in an audio statement on his website which taunted the leaders of the mainstream parties.

“They are all losers, they’ve been there for 25 to 30 years and they’ve led this country to catastrophe.”

As the extent of his success became clear on Monday night, Beppe Grillo’s supporters in his home town of Genoa celebrated early into Tuesday morning.

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Early exit polls from Italy’s general election show a lead for the centre-left bloc led by Pier Luigi Bersani.

The polls suggest Pier Luigi Bersani’s alliance has taken around 34% of the vote for parliament’s lower house, ahead of Silvio Berlusconi’s centre-right group with 29%, Sky Italia reports.

Beppe Grillo’s protest movement is projected to take nearly 20% of votes.

The two-day vote is seen as crucial for efforts to tackle Italy’s economic problems, as well as for the eurozone.

The election was called two months ahead of schedule, after Silvio Berlusconi’s party withdrew its support for Mario Monti’s technocratic government.

The first results based on partial vote counts are due in the next few hours.

If the exit polls are confirmed, they would echo the opinion polls prior to the election which made Pier Luigi Bersani’s centre-left Democratic Party (PD) a consistent frontrunner at nearly 35%.

Pier Luigi Bersani, a former Communist, has pledged to continue with the tough reforms of Mario Monti’s technocratic government, but suggests current European policy needs to do more to promote growth and jobs.

Silvio Berlusconi’s People of Freedom (PdL) centre-right alliance had narrowed the PD lead in the final weeks of campaigning – and may yet prevent Pier Luigi Bersani from winning an overall majority in the Senate, which is being fought on a region-by-region basis.

The fiercely anti-establishment Five Star movement of former comedian Beppe Grillo drew wide and growing support during the campaign, and threatened to be the major upset for the election.

Early exit polls from Italy's general election show a lead for the centre-left bloc led by Pier Luigi Bersani

Early exit polls from Italy’s general election show a lead for the centre-left bloc led by Pier Luigi Bersani

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Italy has begun voting in general elections seen as crucial for the country’s effort to tackle its economic problems, as well as for the eurozone.

Estimates published before a ban on polls two weeks ago gave a lead to Pier Luigi Bersani’s centre-left alliance.

It was thought to be a few points ahead of the centre-right bloc led by ex-Prime Minister Silvio Berlusconi.

On Saturday, Silvio Berlusconi gave a TV interview – in what his opponents said was a breach of the campaigning ban.

However, Silvio Berlusconi’s office later said the interview had been granted only with the explicit agreement that it would be broadcast after polls close on Monday.

A centrist coalition led by outgoing Prime Minister Mario Monti is also running in the election, held on Sunday and Monday.

And opinion polls suggested there would be a strong turnout for popular comedian Beppe Grillo’s anti-establishment movement.

The election was called two months ahead of schedule, after Silvio Berlusconi’s party withdrew its support for Mario Monti’s technocratic government.

The voting is taking place amid a deep recession and austerity measures that have caused widespread public resentment.

It is also being closely watched in the eurozone, with the Italian government’s future commitment to austerity measures particularly under scrutiny.

Italy has begun voting in general elections seen as crucial for the country's effort to tackle its economic problems, as well as for the eurozone

Italy has begun voting in general elections seen as crucial for the country’s effort to tackle its economic problems, as well as for the eurozone

On the first voting day on Sunday, polls across Italy opened 08:00 and will close at 22:00.

The voting will resume again on Monday at 08:00 and finish at 15:00. First results are expected in the early evening.

Some 47 million eligible voters are electing both chambers of parliament – the The Chamber of Deputies and the Senate.

The electoral system is based on proportional representation and party lists, with a series of thresholds to encourage parties to form coalitions.

Pier Luigi Bersani’s centre-left Democratic Party (PD) has been a consistent frontrunner in the opinion polls at nearly 35%.

Pier Luigi Bersani, a former Communist, has pledged to continue with Mario Monti’s reforms, but suggests current European policy needs to do more to promote growth and jobs.

However, recent weeks have seen a narrowing of his lead over Silvio Berlusconi’s People of Freedom (PdL) alliance, who is critical of austerity measures.

Beppe Grillo’s Five Star Movement (M5S) was running third in the polls.

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Former PM Silvio Berlusconi is trying to buy votes in Italy’s election on Sunday by sending out letters promising a tax rebate, his rivals have alleged.

Centre-left leader Pier Luigi Bersani labelled it a “scam”, while the leader of a smaller party accused Silvio Berlusconi of committing a crime.

The letter was sent to voters in swing regions of Italy.

It vows to scrap the unpopular property tax brought in under ex-Prime Minister Mario Monti and pay voters back.

Silvio Berlusconi had already made the pledge on the campaign trail, but putting it in a letter to voters outraged his opponents.

“If I’d crossed paths with Berlusconi after the letter was sent, I’d have told him he’s a cheat,” said Pier Luigi Bersani, whose long-time lead in the polls has been gradually cut back by Silvio Berlusconi.

Former anti-mafia prosecutor Antonio Ingroia, who leads new left-wing Civic Revolution party, said on his website: “With the letter sent to Italians promising money in exchange for votes, Berlusconi has committed one crime, possibly two.”

He called for Silvio Berlusconi to be prosecuted.

Silvio Berlusconi is trying to buy votes in Italy's election on Sunday by sending out letters promising a tax rebate,

Silvio Berlusconi is trying to buy votes in Italy’s election on Sunday by sending out letters promising a tax rebate,

The letter came in an official-looking envelope, headed: “Important notice: reimbursement of IMU 2012.”

“The refund will be available either through a transfer into your bank account, or to you personally at the counter of the post office,” the letter said, according to Reuters.

It was sent to millions of households in Sicily, Veneto, Campania and Lombardy – key regions which could decide the result of the election, which is held on Sunday and Monday.

The IMU tax amounts to 0.4% of the value of a property owner’s primary residence, and is comparable to similar taxes levied elsewhere in Europe.

Polls have shown it is the most unpopular of the budget measures brought in by the Monti government to try to restore confidence in Italy’s finances.

Market confidence in Italy collapsed during 2011 because of its very high debt burden, and only began to recover after Mr Berlusconi resigned as prime minister and Mr Monti took over.

Silvio Berlusconi has declared: “The house is sacred. It should not be taxed.”

But Mario Monti, who is also heading an election coalition, retorted: “When I said that Berlusconi would try to buy the votes of the Italian people with the money of the state, I didn’t think he would [do it] to the letter.”

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Former Italian PM Silvio Berlusconi has stoked controversy by praising Benito Mussolini on Holocaust Memorial Day – despite Il Duce’s anti-Jewish laws.

Benito Mussolini had been wrong to pass anti-Jewish laws but had otherwise been a good leader, said Silvio Berlusconi.

He was speaking at a Milan ceremony commemorating victims of the Nazi Holocaust.

Silvio Berlusconi has not ruled out another stint as PM if his party wins polls next month.

His People of Freedom (PDL) party is hoping to form a centre-right coalition government with another party after elections on February 24-25, but have not named a candidate for prime minister.

Silvio Berlusconi stepped down from a third term as prime minister in November 2011, when he was replaced by the technocrat Mario Monti.

 

Silvio Berlusconi has stoked controversy by praising Benito Mussolini on Holocaust Memorial Day

Silvio Berlusconi has stoked controversy by praising Benito Mussolini on Holocaust Memorial Day

“Obviously the government of [Benito Mussolini’s] time, out of fear that German power might lead to complete victory, preferred to ally itself with Hitler’s Germany rather than opposing it,” said Silvio Berlusconi, who heads a coalition that includes groups with fascist roots.

“The racial laws were the worst fault of Mussolini as a leader, who in so many other ways did well,” he added, referring to the 1938 laws that barred Jews from Italy’s universities and many professions.

The comments were swiftly condemned by the centre-left Democratic Party (PD), which is ahead in the polls.

“Our republic is based on the struggle against Nazi fascism and these are intolerable remarks which are incompatible with leadership of democratic political forces,” said PD spokesman Marco Meloni.

In previous controversial comments, Silvio Berlusconi has incurred the wrath of Queen Elizabeth II for talking too loudly at a photo-call, the Obamas, whom he described as “suntanned”, and the nation of China, by implying that Communist leader Mao Zedong boiled babies to fertilize fields.

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An Italian court has denied the request of former PM Silvio Berlusconi to halt a trial where he is accused of having sex with an under-age prostitute.

The court in Milan also decided they did not need to hear testimony from Moroccan club dancer Karima El Mahroug.

Silvio Berlusconi’s lawyers requested the trial be halted during elections, where he is standing for prime minister.

Both he and Karima El Mahroug have denied ever having sex. Sex with a prostitute who is under 18 is a crime in Italy.

Silvio Berlusconi is standing in the election, after stepping down from a third term as prime minister in November 2011, when he was replaced by the technocrat Mario Monti.

Lawyer Niccolo Ghedini said Silvio Berlusconi would be too busy campaigning to follow the case or attend court – and also feared the trial could influence the election.

But judges rejected the application.

Prosecutors have accused the defence of trying to prolong, and now delay, the trial to avoid a verdict before the election, at the end of February.

An Italian court has denied the request of Silvio Berlusconi to halt a trial where he is accused of having sex with under-age prostitute Karima El Mahroug, better known as Ruby Heartstealer

An Italian court has denied the request of Silvio Berlusconi to halt a trial where he is accused of having sex with under-age prostitute Karima El Mahroug, better known as Ruby Heartstealer

Karima El Mahroug, better known by her nickname “Ruby Heartstealer”, had arrived at the trial to give testimony for the defence.

She has been called twice before, but has failed to show up, apparently because she was on holiday in Mexico.

Sivio Berlusconi, now 76, is accused of paying to have sex with Karima El Mahroug in 2010 when she was 17.

The billionaire media mogul has admitted sending Karima El Mahroug money – but insists he was just making gifts to a friend in need.

Prosecutors say they had sex on 13 occasions.

He denies having had sex with her, and testified that, in any case, she had told him she was 24.

Karima El Mahroug also denies having sex with him – or being a prostitute.

Silvio Berlusconi is also accused of abuse of power, for intervening after Karima El Mahroug was briefly held by police over theft claims.

He allegedly urged police officers to release her, telling them, falsely, that she was a granddaughter of former Egyptian President Hosni Mubarak.

He admits making the phone call, but denies putting police under pressure – and testified that Karima El Mahroug had told him she was related to Hosni Mubarak.

Silvio Berlusconi faces up to 15 years in jail if found guilty.

 

Outgoing Prime Minister Mario Monti is to lead a coalition of centre parties going into Italy’s parliamentary election in February.

Speaking to reporters after four hours of talks with centrist politicians, he said he was willing to be “named leader of the coalition”.

Mario Monti resigned after 13 months as prime minister when predecessor Silvio Berlusconi withdrew his support.

The Vatican newspaper backs Mario Monti’s bid to return as prime minister.

Mario Monti clearly threw his hat into the political ring at a news conference on Friday evening.

“A new political formation has been born,” Mario Monti said.

A single reform list, grouping together centrist parties, would stand for election to the Senate under the provisional title “Monti’s agenda for Italy”, he said.

But in the lower house, the chamber of deputies, there would be a coalition of centrist parties, including the Christian Democrat UDC.

As senator for life, Mario Monti cannot stand for election, but he is able to take part in the campaign and could return to the post of prime minister if a centrist coalition were successful.

He was brought in to form a technocratic government last year after the government of Silvio Berlusconi collapsed under pressure from the financial markets.

Outgoing Prime Minister Mario Monti is to lead a coalition of centre parties going into Italy's parliamentary election in February

Outgoing Prime Minister Mario Monti is to lead a coalition of centre parties going into Italy’s parliamentary election in February

Mario Monti, a former economics professor and European Union Commissioner, was chosen to impose financial rigor on the economy.

In power, he made some progress early on, including raising the retirement age and structural reforms.

But later policies were watered down and Silvio Berlusconi and his centre-right People of Freedom (PDL) party increasingly attacked Mario Monti’s economic austerity.

Mario Monti has described his 13 months in office as “difficult but fascinating”.

“The work we did… has made the country more trustworthy… more competitive and attractive to foreign investors,” he said.

However, ordinary Italians have been hard hit by the combination of tax rises and spending cuts Mario Monti has imposed to repair Italy’s public finances and it is uncertain how well he will fare in the election on 24-25 February 2013.

The left-wing Democratic Party is currently leading the opinion polls, while Silvio Berlusconi will lead the challenge from the right as head of his PDL party.

Mario Monti was optimistic that the electorate will stick with him. He told an impromptu news conference that he expected his supporters could win a “significant result” in the election.

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Italy’s former Prime Minister Silvio Berlusconi has agreed to pay 36 million euros ($48 million) a year to his ex-wife Veronica Lario, reports say.

Silvio Berlusconi will keep the $100 million villa where the couple lived with their three children, as part of a divorce deal reportedly filed on Christmas Day.

Veronica Lario left Berlusconi in 2009 after he was seen at the 18th birthday party of an aspiring model.

Forbes magazine estimated his wealth at nearly $6 billion in March.

The Corriere della Sera newspaper reported that Veronica Lario had initially asked for $56 million a year.

Silvio Berlusconi, 76, reportedly offered her about $5 million.

Silvio Berlusconi has agreed to pay 36 million euros a year to his ex-wife Veronica Lario

Silvio Berlusconi has agreed to pay 36 million euros a year to his ex-wife Veronica Lario

The couple met in a dressing room in 1980 after Berlusconi saw Veronica Lario, 56, perform in a Milan theatre.

They were married in 1990.

Silvio Berlusconi has two other children from his first marriage and is currently engaged to 28-year-old Francesca Pascale.

He was Italy’s longest-serving post-war prime minister until he resigned in November 2011.

Silvio Berlusconi says he will to run for office again in 2013.

His third term in office saw slow growth and a national debt of $2.6 trillion and his government was slow to implement austerity measures in response.

Silvio Berlusconi also became embroiled in a series of financial and sex scandals.

Since leaving office, he has been fighting various court cases.

In October 2012, Silvio Berlusconi was sentenced to four years in jail by a Milan court after being convicted of tax evasion.

Silvio Berlusconi is currently appealing against the decision, and commentators say it is unlikely that he will serve any time in jail.

Italian parliament has been dissolved by President Giorgio Napolitano following caretaker Prime Minister Mario Monti’s resignation.

The move paves the way for elections, now confirmed for 24-25 February.

Mario Monti, brought in last year to form a technocratic government, stepped down on Friday after MPs passed his budget.

It followed the withdrawal of support from former PM Silvio Berlusconi’s party. Silvio Berlusconi is to run again. Mario Monti has not unveiled his plans.

After meeting political leaders, President Giorgio Napolitano told reporters: “I have just signed the decree for the dissolution of parliament.”

He called for a “measured and constructive electoral campaign”.

Soon after, the cabinet announced that the election would be held over two days, on 24-25 February.

Mario Monti, who remains head of an interim administration until the elections, is expected to announce on Sunday whether he will run again.

Italian parliament has been dissolved by President Giorgio Napolitano following Prime Minister Mario Monti's resignation

Italian parliament has been dissolved by President Giorgio Napolitano following Prime Minister Mario Monti’s resignation

Although the economist and former European commissioner cannot stand for election himself as he is already a senator for life, there is speculation that he could become the unofficial leader of a centrist coalition and return as a minister.

Since taking office in November 2011, Mario Monti and his non-party team of ministers have implemented economic austerity measures in the form of spending cuts and tax hikes.

In his last speech before his resignation, Mario Monti said the last 13 months had been “difficult but fascinating”.

“The work we did… has made the country more trustworthy… more competitive and attractive to foreign investors,” he told foreign diplomats in Rome.

The election was triggered after Silvio Berlusconi’s party withdrew its support from Mario Monti’s government, accusing it of following policies that “were too German-centric”.

The three-times prime minister has said he intends to campaign on an anti-austerity platform, pledging to cut taxes and create jobs.

But the polls show Silvio Berlusconi is trailing a centre-left alliance led by Pier Luigi Bersani, which broadly supports a continuation of Mario Monti’s economic programme while pledging to ease some of the pressure on the poorest members of society.

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Italian Prime Minister Mario Monti has resigned today, keeping a promise to step down after the passing of his budget by parliament.

MPs earlier passed the 2013 budget drawn up by his government with 309 votes in favor and 55 against.

An announcement on whether Mario Monti will take part in elections – expected in February – will probably be made at a news conference on Sunday.

Mario Monti was brought in to form a technocratic government last year.

However, the conservative People of Freedom party of his predecessor, Silvio Berlusconi, withdrew its support for his cabinet this month.

Silvio Berlusconi, a three-time prime minister already, is fighting his sixth election campaign.

The new political uncertainty in Italy, the third-biggest economy in the eurozone, has unsettled investors.

Mario Monti travelled to the presidential palace after a cabinet meeting late on Friday to hand in his resignation to President Giorgio Napolitano.

President Giorgio Napolitano accepted the resignation and called on Mario Monti to remain as head of an interim administration until the elections, which analysts say will most probably be held on February 24.

The date will be determined after President Giorgio Napolitano consults with political leaders on Saturday and dissolves the two chambers.

Italian Prime Minister Mario Monti has resigned today, keeping a promise to step down after the passing of his budget by parliament

Italian Prime Minister Mario Monti has resigned today, keeping a promise to step down after the passing of his budget by parliament

In his last speech before his resignation, Mario Monti said his 13 months in office had been “difficult but fascinating”.

“The work we did… has made the country more trustworthy… more competitive and attractive to foreign investors,” Mario Monti told foreign diplomats in Rome.

Opinion polls suggest the centre-left Democratic Party, under Pierluigi Bersani, will win the largest share of the vote in the election.

Since taking office with his non-party team of ministers, Mario Monti has been implementing economic austerity measures and argues that his spending cuts and tax hikes have staved off disaster.

The economist and former European commissioner cannot stand for election himself as he is already a senator for life but he could theoretically return as a minister, perhaps as unofficial leader of a centrist coalition.

“Those closest to him say he has not yet decided and do not rule out a surprise decision,” the Italian daily Corriere Della Sera said.

“Slowly, as the hours pass, the largest parties which supported Monti begin to see him as a potential adversary.”

On Thursday, Mario Monti, 69, defended the “bitter medicine” of budgetary discipline, in what appeared to be a response to attacks by Silvio Berlusconi on austerity policies.

Mario Monti told workers at the Fiat factory that it would be “irresponsible to waste all the sacrifices that Italians [had] made”.

On Friday, he joked that the impending end of his technocratic government was “not the fault of the Mayan prophecy”, referring to a prediction that the world would end on Friday.

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Italian stocks have fallen sharply, reacting to news that Prime Minister Mario Monti plans to resign and former premier Silvio Berlusconi is to run for office again.

The main Italian stock index fell 3.1%.

Other indexes throughout Europe were also lower, with banks the worst hit among shares.

Mario Monti became the leader of a technocrat government in 2011 after investors became worried about Italy’s economic health.

Silvio Berlusconi’s People of Freedom party withdrew its support from the government on Thursday, and Berlusconi confirmed he would lead his party into next year’s elections – now on course to be held slightly earlier than expected.

Mario Monti had planned to serve until April 2013, when the current parliamentary term runs out. He had hoped this would be enough time to “rescue Italy from financial ruin”.

The withdrawal of his political support means that elections are now set for February.

Mario Monti replaced Silvio Berlusconi after the Italian 10-year bond yield reached a euro-era record of 7.48% in November 2011, bringing about Berlusconi’s departure. Since then, Italy’s yields have dropped and the focus has shifted to Spain, which has taken a bailout for its banks, and back to Greece.

However, on Monday, Italy’s 10-year bond yield jumped more 0.3 percentage points to 4.8%.

Among individual shares in Italy, banks were the hardest hit. Italy’s biggest, Unicredit, fell 6%. Banca Monte dei Paschi di Siena fell 7% and Banca Popolare di Milano declined 6.9%.

Across banks in Europe, Germany’s Commerzbank fell 2.9% and France’s BNP Paribas dropped 2.5%. In Spain, banks such as Santander, Bankia and BBVA all turned lower.

“Monti is the one who managed to stabilise Italy and stop the contagion from Greece,” said David Thebault, a trader at Global Equities.

“His surprise resignation brings back the political risk in the equation, something we had forgotten about.”

Italian stocks have fallen sharply, reacting to news that Prime Minister Mario Monti plans to resign and former premier Silvio Berlusconi is to run for office again

Italian stocks have fallen sharply, reacting to news that Prime Minister Mario Monti plans to resign and former premier Silvio Berlusconi is to run for office again

Italy’s government has the biggest debt burden of any of the major eurozone countries at 123% of economic output (GDP), which makes it particularly susceptible to a loss of market confidence. This is because higher borrowing costs would make it very difficult, if not impossible, for the government to roll over its debts as they come due for payment.

Jane Foley, a currency strategist at Rabobank, said: “The resignation of Italy’s technocrat PM Monti at the weekend has re-awakened fears of a return to old style political theatre in the country and brought some fresh downside pressure for the euro.”

The 17-nation currency fell against the dollar and British pound.

Mario Monti, an economist who heads a unelected cabinet of technocrats, has said he will try to pass a budget and financial stability law before standing down.

A statement from the office of President Giorgio Napolitano over the weekend said that Mario Monti “does not think it possible to continue his mandate and consequently made clear his intention to present his resignation”.

If the law for next year’s budget can be passed “quickly”, Mario Monti would immediately confirm his resignation, the statement said.

An election must come within 70 days of the government resigning. Italy had been due to go to the polls by April at the latest.

Mario Monti – a respected former commissioner at the European Union – has tried to pass reforms, including implementing in July a series of spending cuts of 26 billion euros ($32 billion) over three years to tackle the deficit.

But many of the proposals have been watered down or stalled as they have gone through parliament.

Italy’s economy has been shrinking all year – its fourth recession of the past 10 years.

Employers’ lobby group Confindustria predicts that the economy will shrink 2.4% this year, with unemployment hovering around 11%. The government forecasts the economy will contract by 1.2% this year.

Silvio Berlusconi was convicted of tax fraud in October, though he is appealing against that ruling, and he is also on trial accused of paying for sex with an underage prostitute.

He has already served as Italy’s prime minister for three separate terms and built up what is believed to be a vast personal fortune from his business empire.

Silvio Berlusconi has confirmed he will run for prime minister again in 2013.

Former Italian Prime Minister Silvio Berlusconi told reporters in Milan that he was “running to win” – and that his decision came after his People of Freedom party had not found a leader who was as well known as him.

Silvio Berlusconi, 76, said PM Mario Monti’s austerity policies had harmed Italy.

He resigned in November 2011 over Italy’s economic troubles and was convicted of tax fraud in October.

He is appealing against that ruling.

Silvio Berlusconi is also on trial accused of paying for sex with an under-age prostitute, in the so-called “Ruby” case. He denies wrongdoing.

He has already served as Italy’s prime minister for three separate terms and built up what is believed to be a vast personal fortune from his business empire.

Silvio Berlusconi told reporters in Milan that everyone in his party had agreed that the PDL needed a leader “like Berlusconi in 1994” but “there wasn’t one”.

Silvio Berlusconi has confirmed he will run for prime minister again in 2013

Silvio Berlusconi has confirmed he will run for prime minister again in 2013

“It’s not that we did not look… but one needs time to be imposed as leader,” the former prime minister said, mentioning the PDL secretary general Angelino Alfano.

He said he was entering the race because polls put the centre-right PDL behind the Italian left.

The PDL abstained from confidence votes in parliament on Thursday – which the government won.

Mario Monti replaced Silvio Berlusconi as prime minister just over a year ago, and launched a programme of reforms aimed at pulling Italy out of economic crisis.

Silvio Berlusconi said his party had given “proof of great responsibility and had supported [Mario Monti’s] technocrat government for a year, seeking to correct policies that are not convincing, whilst insisting that austerity in an economy that does not grow is harmful. And harm has been done”.

The former leader said he had not missed the office of prime minister “not even for a minute” and he was returning out of a “sense of responsibility”.

Referring to his confrontation with the Italian judiciary, Silvio Berlusconi said he saw it with “a great sense of fear because we have to do with an omnipotent judiciary”.

Mario Monti is due to hold talks with the Italian president later.

President Giorgio Napolitano has said he wants to avoid a “turbulent” end to Mario Monti’s technocratic government.

Silvio Berlusconi has said he feels “obliged” to stay in politics, a day after receiving a jail term for tax fraud.

The former Italian Prime Minister said he wanted to “reform the justice system so that what happened to me doesn’t happen to other citizens”.

Later Silvio Berlusconi confirmed he did not want to stand for prime minister.

He is expected to appeal against the conviction of inflating the price of distribution rights bought by his Mediaset group to avoid paying taxes.

The media mogul has also been barred from holding office for five years.

“There will be consequences,” Silvio Berlusconi said in an interview given on Saturday to TG5, one of the TV channels owned by Mediaset.

“I feel obliged to stay in the field,” he added.

Silvio Berlusconi went on to dismiss the case against him as “science fiction”.

On Wednesday, he said he would not to run again for office – confining himself to “giving advice, experience, speaking and judging without intruding”.

Silvio Berlusconi has said he feels "obliged" to stay in politics, a day after receiving a jail term for tax fraud

Silvio Berlusconi has said he feels “obliged” to stay in politics, a day after receiving a jail term for tax fraud

Silvio Berlusconi’s lawyers said on Friday that he would appeal against the four-year jail sentence for tax fraud, according to media reports.

The appeal will be lodged by 10 November, reports said, and could take several years.

A furious Silvio Berlusconi went on national television on Friday to condemn the sentence as “intolerable judicial harassment”.

He has long complained that he is being persecuted by left-leaning judges in Milan.

“It is a political, incredible and intolerable judgement,” Silvio Berlusconi said on Italia 1 – another one of the TV stations he owns.

Silvio Berlusconi has faced a number of trials.

He has in the past either been cleared, or cases have run beyond the judicial time limit.

In 1997 Silvio Berlusconi received a suspended sentence for false book-keeping but that conviction was reversed on appeal.

In the latest case, prosecutors said that part of the money declared for the purchase of US film rights was skimmed off to create illegal slush funds, reducing tax liabilities for Silvio Berlusconi’s Mediaset group.

The court handed Silvio Berlusconi a longer sentence than the three years and eight months requested by prosecutors. However, it later announced that the sentence served would be one year due to a 2006 amnesty law aimed at reducing prison overcrowding.

It ordered him and his co-defendants to pay 10 million euros in damages.

Both the jail term and the ban from holding office will only take effect if the sentence is upheld by a higher court.

Silvio Berlusconi is unlikely ever to serve his sentence as the conviction first has to be confirmed by two successive courts of appeal.

Those appeals could take years, he adds.

In February a court threw out a corruption case against him after the statute of limitations had expired.

He is also currently on trial charged with paying for sex with an underage girl and trying to cover it up. He denies any wrongdoing.

Silvio Berlusconi, 76, was forced to resign as prime minister of a centre-right coalition last November.

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Silvio Berlusconi’s lawyers are to appeal against his jail sentence for tax fraud, Italian media has reported.

The appeal will be lodged by 10 November, reports said, and could take several years.

Former Prime Minister Silvie Berlusconi and others were convicted of inflating the price of distribution rights bought by his Mediaset group to avoid paying taxes.

On Friday a Milan court sentenced him to four years but later cut it to one.

The media mogul was also barred from holding office for five years.

A furious Silvio Berlusconi later went on national television to condemn the sentence as “intolerable judicial harassment”.

He has long complained that he is being persecuted by left-leaning judges in Milan.

“It is a political, incredible and intolerable judgement,” Silvio Berlusconi said on Italia 1 – one of the TV stations he owns.

“It is without any doubt a political verdict just as all the cases invented against me are political.”

Silvio Berlusconi’s lawyers are to appeal against his jail sentence for tax fraud

Silvio Berlusconi’s lawyers are to appeal against his jail sentence for tax fraud

Silvio Berlusconi has faced a number of trials but it is the first time he has been sentenced for any crime concerning his business activities.

He has in the past either been cleared, or cases have run beyond the judicial time limit.

In 1997 Silvio Berlusconi received a suspended sentence for false book-keeping but that conviction was reversed on appeal.

In the latest case, prosecutors said that part of the money declared for the purchase of US film rights was skimmed off to create illegal slush funds, reducing tax liabilities for Silvio Berlusconi’s Mediaset group.

The court handed Silvio Berlusconi a longer sentence than the three years and eight months requested by prosecutors. However, it later announced that the sentence would be cut to one year due to a 2006 amnesty law aimed at reducing prison overcrowding.

It ordered him and his co-defendants to pay 10 million euros in damages.

Both the jail term and the ban from holding office will only take effect if the sentence is upheld by a higher court.

Silvio Berlusconi is unlikely ever to serve his sentence as the conviction first has to be confirmed by two successive courts of appeal.

Those appeals could take years.

In February a court threw out a corruption case against him after the statute of limitations had expired.

Silvio Berlusconi is also currently on trial charged with paying for sex with an underage girl and trying to cover it up. He denies any wrongdoing.

Silvio Berlusconi, 76, was forced to resign as prime minister of a centre-right coalition last November, and recently said he had no plans to stand again in elections due next year.

 

Former Italian Prime Minister Silvio Berlusconi has been sentenced to four years in jail for tax fraud.

Silvio Berlusconi and others were accused of buying US film rights at inflated prices via two offshore companies under his control.

The former prime minister is expected to appeal against the verdict.

Silvio Berlusconi has faced a number of trials connected to his business affairs, but has either been cleared or cases have run beyond the judicial time limit.

In the case for which he was sentenced on Friday, prosecutors alleged that part of the money declared for the purchase of film rights was skimmed off to create illegal slush funds, reducing tax liabilities for Silvio Berlusconi’s Mediaset group.

The court handed Silvio Berlusconi a longer sentence than the three years and eight months requested by prosecutors.

It ordered him and nine other defendants to pay 10 million euros in damages and banned him from holding public office for three years.

Silvio Berlusconi has been sentenced to four years in jail for tax fraud

Silvio Berlusconi has been sentenced to four years in jail for tax fraud

Both the jail term and the ban would only take effect if the sentence is upheld by a higher court, Italian news agency Ansa reported.

The trial began six years ago and has been subject to repeated delays, in part because of an immunity law that protected Silvio Berlusconi while he was prime minister.

Silvio Berlusconi, 76, has dominated Italian politics for most of the last 20 years.

He was forced to resign as the prime minister of a centre-right coalition last November, and recently said he had no plans to stand again in elections due next year.

Silvio Berlusconi has repeatedly claimed that he is a victim of persecution by a left-wing judiciary.

 

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Former Italian Prime Minister Silvio Berlusconi has denied any “intimate ties” with underage prostitute Ruby Rubacuori he is charged with.

Speaking at his trial in Milan, Silvio Berlusconi said there were never scenes “of a sexual nature” at his home.

Silvio Berlusconi said the expression “bunga-bunga” to refer to alleged sex parties came from a joke he had used from time to time.

Referring to the charge of abusing his powers to get the girl, nicknamed Ruby, released from police custody, he denied ever having pressured Milan police.

The girl, Moroccan nightclub dancer Karima El-Mahroug, had been arrested for suspected theft.

Silvio Berlusconi, now 76, is accused of paying to have sex with Karima El-Mahroug – who is widely known as Ruby Rubacuori (“heart-stealer”) – in 2010 when she was 17.

In a statement before judges in Milan, he said she was 24 “as she herself said”.

Prosecutors maintain that the former prime minister had sex with Karima El-Mahroug on 13 occasions.

“I have never had any intimate relations with her,” Silvio Berlusconi said.

Silvio Berlusconi has denied any "intimate ties" with underage prostitute Ruby Rubacuori he is charged with

Silvio Berlusconi has denied any “intimate ties” with underage prostitute Ruby Rubacuori he is charged with

Karima El-Mahroug has always denied having sex with the prime minister when she was 17 – or being a prostitute.

“I can exclude with absolute certainty that there were ever any scenes of a sexual nature” at his Milan villa, the Italian media mogul and politician said.

Correspondents have promised wire-tap evidence expected to reveal how women were procured for parties at the villa.

The list of 78 witnesses named by Silvio Berlusconi includes Real Madrid footballer Cristiano Ronaldo, Hollywood star George Clooney and his girlfriend, and the Italian model and TV star Elisabetta Canalis.

All are said to have been guests at one of Silvio Berlusconi’s parties.

The former leader told the court on Wednesday that he had hosted dinners where everybody ate together – with him at the centre monopolizing the conversation. There had also been dancing at his children’s discotheque.

Silvio Berlusconi, who resigned over Italy’s economic crisis last November, is said to have urged police officers to release Ruby, allegedly telling them she was a granddaughter of former Egyptian President Hosni Mubarak.

Referring to the abuse-of-power charge, he said: “I have never exercised pressure on officials of the Milan police.”

“The girl said she was Egyptian, coming from an important family related to Mubarak,” he said.

Silvio Berlusconi added that he had believed her and had telephoned police because he did not want to provoke “a diplomatic incident”, but that the call had been limited to “seeking information”.

Silvio Berlusconi faces up to 15 years in jail if found guilty.