Italy's economy minister resigns

Italian Economy Minister, who vainly tried to force the resignation of the Bank of Italy chief over a bank takeover scandal, has resigned, a ministry official said Thursday. The move deals a blow to Premier Silvio Berlusconi's government less than a year from general elections.

Domenico Siniscalco stepped down Wednesday night, said an Economy Ministry official, speaking on condition of anonymity. The official refused to give details.

Italian news reports said Siniscalco had resigned after his failed efforts to oust Bank of Italy governor Antonio Fazio.

Siniscalco had been scheduled to attend an International Monetary Fund meeting in Washington, but Italy will now be represented by the ministry's director-general, the official said.

"Really, I couldn't take it anymore," Siniscalco was quoted as saying by the Italian paper La Repubblica.

The move rocked the political and business world. Berlusconi went to see Italy's president to discuss the situation, and was expected to meet with leaders from his governing coalition later in the day. The center-left opposition urged the whole government to step down and call early elections.

"Acknowledge your crisis, resign," opposition leader Piero Fassino told lawmakers in parliament, "and let's go to the polls."

Italy is scheduled to have a general election in mid-2006.

The head of Italy's powerful industrialists association, Luca Cordero di Montezemolo, said the resignation was "further cause for great concern," according to the ANSA news agency.

However, news of Siniscalco's resignation did not immediately produce major changes in the yield paid by Italian government bonds.

According to Italian daily La Repubblica, Siniscalco contended the government was "immobile" in the scandal surrounding Fazio, who has been accused of discriminating against a Dutch bank in a takeover battle.

"The problem isn't Fazio, but those who are incapable of solving the problem," La Repubblica quoted Siniscalco as saying. "For this I'm not embittered, I'm scandalized."

Siniscalco had repeatedly urged Fazio to step down, but the governor has resisted the call, reports the AP.