Prime Minister Enrico Letta battles to save Italy from political chaos

Leader of the centre-left Democratic Party will urge moderates from Silvio Berlusconi’s party and waverers in the anti-establishment Five Star Movement of Beppe Grillo to keep the administration afloat

With chaos – never far away in Italian politics – descending on Rome once more, Wednesday will be make-or-break day for Prime Minister Enrico Letta, when he calls a confidence vote on his fragile coalition.

After the centre-right leader Silvio Berlusconi announced at the weekend he wanted to pull the plug and head to the polls, cabinet ministers from the tycoon’s Pdl/Forza Italia party obeyed his command and resigned en masse. This suggested Mr Letta was about to lose his parliamentary majority, too.

Mr Letta, the leader of the centre-left Democratic Party, has a majority in the lower house, the Chamber of Deputies. But in the upper chamber, The Senate, he is around 20 seats short without the support of the centre-right.

He and the head of state, President Giorgio Napolitano, will urge moderates from Berlusconi’s party and waverers in the anti-establishment Five Star Movement of Beppe Grillo to keep the administration afloat.

The consensus among Mr Letta, Mr Napolitano, political moderates and the Italian business community is that avoiding fresh elections and the uncertainty they would bring is vital to underpin the modest economic recovery – and prevent attacks by financial speculators.

There are some hopeful signs for Mr Letta. Cracks are appearing in Berlusconi’s political grouping, with the five ministers he ordered to quit – despite not being in government himself – now showing signs of dissent.

There is a widespread feeling that Berlusconi’s actions reflect his fury at centre-left plans to expel him from parliament because of his tax fraud conviction rather than his opposition to VAT rises – the official reason. When Pdl figures as slavishly loyal to Berlusconi as incumbent Deputy Prime Minister Angelino Alfano begin to question their master, the words “rats” and “sinking ship” come to mind.

Vincenzo Scarpetta, the Italy analyst of the Open Europe think-tank, said it was “tough but definitely not unrealistic” of Mr Letta to hope for 20 or so Senate defections from the parties of Berlusconi and Grillo.

“It suggests Letta does have a chance of winning the vote in the Senate, and staying in power with a different, albeit thinner, parliamentary majority – and after a rather substantial cabinet reshuffle,” Mr Scarpetta said.

But this would still amount to little more than a political sticking plaster. Such an unwieldy coalition probably would not last for long. Mr Letta would aim to introduce a few vital reforms – including changing the proportional representation system to deliver more stable government – before planning for elections early next year.

But the bleaker scenario is that Mr Letta loses the confidence vote. He would have to resign. It would then be up to President Napolitano to try and form an alternative government. If he fails to get another coalition up and running, he will have to call fresh elections, although not until 45 days after parliament is dissolved.

New elections would not only bring more uncertainty and financial instability, but also rule out much-needed changes to electoral law – making another inconclusive election result – and further instability – more likely.