PM Enrico Letta calls on all sides to act responsibly but Berlusconi demands judicial reform after tax fraud verdict
Silvio Berlusconi, the former Italian prime minister who was convicted of tax fraud on Thursday, has reportedly told his centre-right MPs they must prepare for a fresh election if the current coalition government does not pursue judicial reform
Stinging from the supreme court's landmark decision to hand him the first definitive conviction in 20 years of legal tussles, the leader of the centre-right Freedom People party (PdL) held a meeting with his MPs in Rome at which he received a standing ovation.
"If there is not a reform of the justice system we are ready for elections," he told his followers. The comments will fuel concern that the eurozone's third-largest economy is entering a new period of uncertainty following the verdict.
Earlier in the day, Enrico Letta, the prime minister, called on all political players to act responsibly and keep his ruling coalition afloat "in the interests of the nation".
In the aftermath of the court's decision to uphold the former prime minister's conviction for tax fraud, Letta said: "It would be a crime not to keep going … because the government's work is starting to bear fruit."
But it was not certain that his appeal would be listened to by furious members of Berlusconi's PdL. Some said there was a possibility the party would ask the president, Giorgio Napolitano, to pardon Berlusconi. Several government ministers were reported to have told the party leadership that they would be willing to quit the government if necessary.
Some members of Letta's centre-left Democratic party (PD) are hinting they may want to draw a line at being in government with a convicted criminal.
"This alliance is now unsustainable. The PD should draw up an exit strategy," Pippo Civati, a centre-left MP, was quoted as saying. "Let's pass the electoral law, then go straight back to the polls."
On Thursday Berlusconi was ordered to serve four years in prison, a sentence that has been commuted to one year under a 2006 amnesty and will consist, due to his age, of detention under house arrest or community service rather than jail.
The five judges of the court of cassation ordered another part of the previous sentence – a ban on public office – to be re-evaluated by a lower court.
The conviction, Berlusconi's first in 20 years of cat and mouse with the courts, provoked outrage from supporters of Italy's longest-serving postwar prime minister. MPs in the PdL on Friday rushed to their leader's defence, declaring their unfailing support for him.
"No sentence will ever be able to deprive Berlusconi of the leadership … which millions of Italians have always seen in him," said one MP, Mariastella Gelmini. "Once again Silvio Berlusconi is giving everyone a lesson in dignity, courage and love for Italy."
His one-year sentence will not be enforced until the autumn but a potentially explosive vote on Berlusconi's future in the upper house of parliament, or senate, could come sooner, probably in September.
Under an anti-corruption law passed last year by the outgoing technocratic government of Mario Monti, the billionaire media tycoon will be ineligible to run for office for the next six years. The senate will have to vote on whether or not to let him keep his seat – a scenario that could expose the tensions not only in Lettta's coalition but within his deeply divided party as well.
Even if – as is likely – the senate votes to oust the 76-year-old, Berlusconi will still not be lacking in support. He will be able to continue as leader of the centre-right, in the same way that Beppe Grillo is the figurehead of the anti-establishment Five Star Movement despite not having been elected and himself having a criminal conviction.
Berlusconi has said he wants to disband the PdL and reform Forza Italia, the party with which he entered politics in the mid-1990s.
Renato Brunetta, head of the PdL in the lower house of parliament, told Italian radio: "Leaders aren't leaders because they are elected or because they're in parliament or have an MP's pass. Leaders are leaders because they represent a people, a part of the people, they represent history, they represent the past, the present, the future."
There is also speculation that Berlusconi may formally anoint his daughter, Marina, as his political heir and keep the family brand in the spotlight.
The fragile coalition government that Italy has had for just three months was the product of nearly two months of stalemate and fraught negotiations, and the president, Giorgio Napolitano, is understood to be desperate to avoid any repeat of the political paralysis.
On Friday, despite all the sound and fury, the financial markets appeared to have faith in the government's ability to survive, at least in the medium term. The spread between Italian 10-year bond yields and their German counterparts fell by eight basis points from the previous day. Shares in Mediaset, Berlusconi's broadcasting empire, dipped in early trade.
