Italy's Berlusconi survives test with arrest vote

By NICOLE WINFIELD | September 22, 2011 | 8:10 AM EDT

ROME (AP) — Premier Silvio Berlusconi narrowly survived a test in Parliament on Thursday after lawmakers decided not to lift the immunity of an allied deputy under investigation in a corruption probe.

Lawmakers in the lower Chamber of Deputies voted 312-306 to keep parliamentary immunity intact for Marco Milanese, a former top aide to Finance Minister Giulio Tremonti. Italian lawmakers enjoy immunity from arrest unless they vote to lift it.

The vote by secret ballot was a key test of the cohesiveness of Berlusconi's majority. If Berlusconi's allies had turned on him and lifted Milanese's immunity, it would have sent a strong signal of divisions within the majority.

It would have also reflected poorly on Tremonti, the respected architect of Italy's austerity measures as the country struggles to avoid being sucked into Europe's debt crisis.

Berlusconi said he was satisfied with the outcome but declined further comment.

But according to vote breakdowns in the Italian media, at least seven Berlusconi allies did vote to have Milanese arrested, taking advantage of the secret ballot to break ranks. Their numbers, however, weren't enough to affect the final outcome.

Milanese resigned as Tremonti's political adviser after he was caught up in June in a corruption probe in which he was accused by Naples prosecutors of allegedly passing on confidential information in exchange for money and services. He denies the accusations.

Tremonti himself came under the spotlight for having paid Milanese under the table for the use of Milanese's Rome pied-a-terre for the nights he spent in the capital. Tremonti is not the subject of any criminal probe, and he has acknowledged that he should have handled his housing arrangements better.

But the former accountant-turned-politician was politically weakened by the Milanese affair, coming at a time when markets needed reassurances from him about Italy's seriousness about reigning in its debt.

Tremonti is widely lauded as the figure who had helped Italy survive the 2008 financial crisis by keeping a tight rein on spending. He pushed through Italy's austerity measures, designed to cut debt through tax hikes and budget cuts, but only after internal political bickering altered the original package several times.

This week, S&P downgraded Italian sovereign bonds to A from A+ — reinforcing fears that Italy, with the second-highest debt burden in the eurozone after Greece, is getting drawn into Europe's debt crisis.

The agency cited weaker growth prospects and a fragile governing coalition as key reasons for its surprisingly swift downgrade, just four months after issuing a warning.