Berlusconi to address parliament for confidence vote

Italian Prime Minister Silvio Berlusconi under pressure to convince the country's president and central bank that he can lead Italy through the economic and social challenges it faces

Italian Prime Minister Silvio Berlusconi, fighting for his political life and seeking to quell an internal rebellion in his centre-right coalition, will ask parliament on Thursday for a confidence vote that will allow him to continue governing.
Berlusconi, who is under pressure by Italy's president as well as the central bank governor to prove that he can deal with the country's myriad social and economic problems, is due to address the lower house at about 0900 GMT.
The confidence vote is expected to be held sometime on Friday and Berlusconi will most likely win.
But most analysts say he will also emerge so bruised that it will be only a matter of months before a new crisis hits and that the country will likely hold early elections next year, a year before they are next scheduled.
"It's either counter-attack or die," said Il Foglio, a political broadsheet which reflects Berlusconi's thinking.
In his address, Berlusconi is expected to stress that there is no alternative to his government, that a crisis now would be irresponsible at a time when the economy is under huge pressure from the markets, and that he intends to govern until 2013.
Opposition parties have already announced that they will boycott the speech but then return for the debate and vote against Berlusconi on Friday.
Berlusconi decided to address parliament after the coalition -- wracked by internal dissent -- suffered a major embarrassment when it failed to pass a routine budget provision on Tuesday.
A number of centre-right deputies were absent for the vote, a fact which infuriated Berlusconi and fed suspicions that some dissenters stayed away to send a message to the prime minister about the deep malaise within the coalition.
INTERNAL CHALLENGES
Berlusconi is facing internal challenges from a number of ministers who are unhappy with the way he is running the coalition and the damage his personal and judicial woes have done to Italy's reputation.
The prime minister, whose current government was elected in 2008, said that the loss of Tuesday's vote was just an "accident" and that there was no reason to resign as the opposition has demanded.
President Giorgio Napolitano entered the fray on Wednesday when he issued a statement expressing deep concern about the viability of government and demanding a "credible response" to Italy's problems.
Italy is also under pressure from Mario Draghi, the outgoing Bank of Italy governor who will become the president of the European Central Bank next month.
In a speech on Wednesday night, Draghi said Italy had already wasted too much time without reforming its economy and unless it acted urgently, rising bond yields could nullify the benefits from recent budget cuts.
Yields on Italian government bonds are dangerously high considering its massive public debt, because of investors' lack of confidence that Berlusconi's government can take decisive action and worries over Italy's chronically sluggish growth.
Ratings agency Fitch last week cut Italy's credit rating by one notch with a negative outlook, following a downgrade by Moody's and Standard and Poor's, underlining market concern over the stability of its public finances and its weak growth.
A 60 billion euro austerity package to balance the budget by 2013 was passed last month only after weeks of hesitation and delay, while the timetable for a decree to pass economic reforms and approve the sale of state assets has slipped to 20 October.