On Tuesday, Mr. Berlusconi’s government hit its weakest point yet when it failed to garner a majority on a technical vote on last year’s budget review. Visibly shaken, Mr. Berlusconi left the lower house without speaking publicly, while members of the opposition called on him to resign.

It was unclear whether the upset marked the imminent demise of the Berlusconi government or whether it was just another nail in the coffin for a political era that is widely considered to be finished — by Italians, if perhaps not by the politicians who are desperately scrambling to stay in power.

Today, Italy’s political landscape is as byzantine as it has ever been in the nation’s postwar history, as scores of factions across the political spectrum scramble to form alliances strong enough to bring down Mr. Berlusconi — and to keep their seats the morning after. It is not easy.

Lately, most political ferment in Italy has been directed not at the economy or the budget, but at changing the electoral law to discourage weak parliamentary majorities like Mr. Berlusconi’s.

Even within Mr. Berlusconi’s own fractious center-right coalition, more members of Parliament are upset with him and see him as a growing liability to Italy’s economy and standing on the world stage, but so far no group has shown the muscle or the numbers to form a viable alternative government.

“They’re frustrated, they’re angry at him, but they have a love-hate relationship: they can’t free themselves from the monster,” said Stefano Folli, a political commentator for the daily business newspaper Il Sole 24 Ore. “It’s a psychoanalytic case.”

After Greece, it is Italy, with its staggering debt and zero projected growth, that is considered most at risk of default if European leaders fail to come up with a swift plan to save the euro. But as the long twilight of Mr. Berlusconi’s rule lingers on, the divide between external economic reality and internal political maneuvering has never been wider.

Last week, Moody’s downgraded Italy, as well as several regional governments and three of its largest blue-chip companies, Eni, Enel and Finmeccanica, precipitously driving up borrowing costs.

Foreign investors and many in Italy’s business community — and at least one prominent center-left leader, Walter Veltroni — hope for a government of technocrats led by a respected nonpolitician who could carry out the unpopular structural economic changes mandated by the European Central Bank in August in exchange for buying Italian debt and who would not worry about losing the next elections.

That happened in Italy in 1992, after the postwar political order collapsed in a major bribery scandal and the fall of the Berlin Wall, when Giuliano Amato, then the prime minister, pushed through structural changes during a one-year technocratic government.

But such a government would require a strong consensus in Parliament. Tuesday’s upset showed that Mr. Berlusconi’s majority was hanging by a thread. But by force of character, the prime minister has insisted he will not step down despite his slipping support and a host of embarrassing legal tangles.

“There is no alternative to our government,” he said in a video message to his supporters last Friday. He then flew to Russia on a private visit to celebrate the birthday of his good friend, Russia’s prime minister, Vladimir V. Putin.

Last week, Italy was abuzz about how Mr. Berlusconi had joked about forming a new party called not “Forza Italia,” or “Go, Italy!” the name of his first political party, but rather substituting Italy with a vulgar term for the female anatomy.

The episode provided fodder for a burgeoning coalition of former Christian Democrats who, reportedly with the support of the Vatican, are putting increasing pressure on Mr. Berlusconi to step down.

But analysts say that the grouping has no clear political program and might not be able to cobble together a majority to form a government even if it did bring Mr. Berlusconi down. “A group of people who are upset could make him fall, but then there’s no other combination. He will always be able to destabilize the new government,” Mr. Folli said.

For its part, the nation’s center-left opposition is weak and divided, not least on economic policy, with its leaders ranging from neoliberals who favor loosening labor regulations to ex-Communists opposed to much of the austerity program that Italy passed in September.

While the economic storm continues to batter Italy, the government has deadlocked on whether a growth stimulus bill should include a tax amnesty that would allow Italians to pay only a percentage of their unpaid (or evaded) taxes, as well as an amnesty on illegal construction. Such amnesties are a longstanding tradition in Italian politics and are popular with many voters, but the Italian industrialists’ association has slammed the proposal as rewarding bad behavior.

Mr. Berlusconi is also openly sparring with Finance Minister Giulio Tremonti, whom he considers a political rival, despite a recent photo opportunity together. Mr. Tremonti arrived late for Tuesday’s parliamentary vote. (In a statement, his office said his absence had “no political significance.”)

That tension between the two men has been most evident over the nomination of a successor to Mario Draghi as president of the Bank of Italy. Mr. Draghi, who becomes president of the European Central Bank on Nov. 1, is backing his deputy at the Bank of Italy, Fabrizio Saccomanni. But Mr. Tremonti and the leader of the powerful Northern League party support Vittorio Grilli, director general of the Finance Ministry.

As the general stalemate lingers — and the economic storm grows — Italy’s elites are growing desperate. “Who’s managing the economy of Italy? At the moment, that’s a question without an answer,” Mr. Folli said. “Unfortunately, no one.”

Article source: http://www.nytimes.com/2011/10/12/world/europe/italys-political-disarray-plays-to-berlusconis-advantage.html?partner=rss&emc=rss