Italian budget vote.

7th November 2011

Ian Copelin, Investment Director, my wealth comments “UK and Asian equities declined this morning, while US futures indicate a weaker start to trading this afternoon, over concern that Europe’s sovereign-debt crisis will spread.

Italy’s parliament will vote tomorrow on the 2010 budget report.  The Chamber of Deputies failed to rubber-stamp the routine measure in an initial ballot last month, prompting Berlusconi to call a confidence ballot, which he won with 316 votes – barely a majority in the 630-seat body.  A second defeat on the budget law would likely lead to another confidence vote, with the defections threatening the outcome.

Italian governments routinely call confidence votes to bring rebellious lawmakers into line and speed the passage of legislation (Berlusconi has already used the mechanism more than 50 times since his election in 2008).  This time, however, it may be different – two of his allies defected to the opposition last week, while a third quit last night.  Many others have called for Berlusconi to resign and allow a more broadly backed government.”