Silvio Berlusconi insists government is stable despite economy minister resignation

Premier Silvio Berlusconi said Tuesday that he did everything in his power to seek the resignation of Bank of Italy Governor Antonio Fazio, and insisted the government was stable despite the departure of the economy minister.

Berlusconi, addressing parliament following the economy minister's resignation amid a standoff with Fazio, said he had to respect the independence of Italy's central bank.

"The government could not intervene directly, and therefore I did the only thing we could do: I appealed to the governor, to his sensitivity and his conscience," the premier told lawmakers.

Berlusconi last week urged Fazio, who has been clinging to his job, to step down.

Domenico Siniscalco resigned as economy minister early Thursday, a move that prompted claims by the opposition that the whole government should step down and allow for early elections. Berlusconi said the government was stable.

"The stability of the government's action is determined by the figure of its prime minister," he insisted.

Siniscalco's resignation was seen as hurting the government, coming just days before the Cabinet must present its budget for 2006, and months away from a national vote scheduled for the spring of 2006.

He had criticized the government as "immobile" in the controversy surrounding Fazio. The government cannot directly oust the central bank's governor.

Accusations against Fazio center on his handling of a struggle between Banca Italiana Popolare Scarl and Dutch rival ABN Amro Holding NV for control of Banca Antonveneta SpA. Wiretapped conversations published in the Italian media suggested Fazio unfairly favored the Italian bank's bid. Fazio denies wrongdoing, and has resisted widespread calls for his resignation.

Berlusconi named deputy premier Giulio Tremonti as the new economy minister.

Tremonti, who had already served as economy minister before Siniscalco, is one of Fazio's fiercest critics. The two ignored each other at an international finance summit in Washington last weekend.


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