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 In brief remarks Wednesday before the confidence vote, Berlusconi said: "Italy needs a government that can produce structural and institutional reforms that the country needs to modernize. We have decided, not without internal strife, to vote in confidence."
It was a huge setback for Berlusconi. He had demanded his five Cabinet ministers quit the government and bring it down. He is incensed at a vote planned Friday that could strip him of his Senate seat following his tax fraud conviction and four-year prison sentence.
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THIS IS A BREAKING NEWS UPDATE.
AP's earlier story is below.
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The survival of Italy's government was at stake Wednesday before expected confidence votes in Parliament forced by Silvio Berlusconi's decision to yank his party's support. But a divisive split among Berlusconi stalwarts in favor of stability might save the fragile ruling coalition, for now.
Premier Enrico Letta made a last-ditch appeal to lawmakers to save his government after Berlusconi demanded his five Cabinet ministers quit and bring it down, incensed at a vote planned Friday that could strip him of his Senate seat following his tax fraud conviction and four-year prison sentence.
But in a remarkable challenge to Berlusconi's authority, several allies balked and said they would instead support Letta's hybrid right-left coalition. Italy's finances are in a critical state, pressing economic measures must be passed and Italy's president has insisted that a new electoral law be passed to avoid inconclusive results in any future vote.
The numbers though were in flux: Dissenting Sen. Roberto Formigoni said some 25 Berlusconi allies had signed on to support Letta, perhaps enough to tip the balance in Letta's favor in the 321-member chamber. But Berlusconi is a master politician who has outlived many premature political obituaries, and it wasn't clear if he still had enough supporters or could woo any dissenters back at the last minute.
In a speech to the Senate on Wednesday, Letta hailed his 5-month-old government's successes and outlined his agenda to revive Italy's moribund economy and turn around its record unemployment. He warned lawmakers that Italy "runs a risk, a fatal risk" depending on the choices they make.
"Give us your confidence to realize these objectives. Give us your confidence for all that has been accomplished," Letta said to applause. "A confidence vote that isn't against anyone, but a confidence vote for Italy and Italians."
The key vote would be in the Senate, where Berlusconi's allies have a narrow majority.
Entering the Senate, Berlusconi appeared less combative than he has in recent days: "We'll see what happens," Italian news agencies quoted him as saying. "We'll listen to Letta's speech and then decide."
Berlusconi's People of Freedom party has been badly divided ever since Italy's high court upheld his tax fraud conviction and sentence in August. But it has been thrown into chaos after several lawmakers and his closest ally and political heir Angelino Alfano openly defied him and said they would support Letta.
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 Alfano has served as Letta's deputy in the hybrid government and clearly thinks it has accomplished a good deal of the Berlusconi party agenda.
With Alfano sitting by his side, Letta appealed to lawmakers' sense of duty to not create any more upheaval, which has caused Italy untold financial loss in recent years. He compared it to Italy's great post-World War II economic boom that was accompanied by comparative political stability.
"The majority of Italians are telling us -- I should say they are yelling at us -- that they can't take any more of these scenes of bloodshed in the political arena, and (politicians) who fight over everything but nothing ever changes," he said.
Many center-left lawmakers, as well as ordinary Italians, have expressed disgust that the government was essentially teetering over the legal woes of a single man, since the crisis began over Berlusconi's attempt to avoid being kicked out of the Senate for his tax fraud conviction.
A law passed in 2012 says anyone receiving sentences longer than two years cannot hold public office for six years. Berlusconi has challenged the law's constitutionality and has accused judges who handed down the sentence of trying to eliminate him from Italy's political life.
Letta addressed his claims straight on in his speech to the Senate, saying Italy is a country based on the rule of law.
"In a democratic state, sentences are respected and applied, always with the right to the defense without treatment in favor or against individuals, whether they be citizens or senators," he said.
The unusual defiance of Berlusconi by his stalwart allies could signal that the three-time former premier's influence is seriously eroding after two decades leading Italy's center-right and being the main point of reference in Italy's political scene.
And the 77-year-old billionaire media mogul has reacted by making seemingly erratic and counterproductive demands that some Italian commentators have likened to the desperate, fitful sparks of a candle going out.
But Berlusconi has endured numerous political setbacks in the past, only to re-emerge strong.
"Berlusconi has nine lives and we can't exclude a tenth," leading daily Corriere della Sera wrote on its front page Wednesday. "He knows the art of seducing senators and still has enough wiggle room for a turnabout at the last minute."
[Associated
Press; By NICOLE WINFIELD]
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