• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Standoff in Italy as economy minister mocks Fazio

Posted on: Friday, 23 September 2005, 12:22 CDT

By Francesca Landini

WASHINGTON (Reuters) - Italy's new economy minister on Friday used his first public comments in office to poke fun at central bank governor Antonio Fazio, who has spurned a demand from Prime Minister Silvio Berlusconi to quit.

Economy Minister Giulio Tremonti was attending meetings of the Group of Seven and the International Monetary Fund in Washington with his long-time adversary Fazio, as commentators warned Italy's credibility was plumbing new lows.

The standoff over the Bank of Italy compounded problems for Berlusconi after former Economy Minister Domenico Siniscalco resigned on Thursday complaining about the prime minister's unwillingness to drive Fazio from office.

"If you don't go away, I'll have you roughed up a bit," Tremonti told reporters, imitating the voice of the central bank chief who is under pressure to step down over allegations he was biased in bank takeover battles that he was supposed to oversee.

Last October, in a now famous episode caught on television in Italy, Fazio tried to avoid an insistent reporter from an Italian satirical TV program, telling his body guards to "rough him up a bit."

Tremonti, who had a bitter relationship with Fazio during his previous stint as economy minister between 2001 and 2004, flew to Washington immediately after being named minister on Thursday and vowed to make Fazio's life tough.

"I'm going to completely ignore him," Tremonti was quoted as saying by Corriere della Sera newspaper on Friday, adding: "I really want to see his face when he sees me."

Opposition leader Romano Prodi said the situation was "making us a laughing stock" on the international stage, adding that Berlusconi should resign to open the way for a snap general election, some eight months ahead of schedule.

"ROMAN CIRCUS"

Berlusconi turned his guns on Fazio on Thursday -- too late to prevent Siniscalco's exit -- telling the central banker he should step down over accusations he unfairly favored a local bank in a cross-border takeover fight.

But Berlusconi in turn faced an open challenge to his own leadership credentials from inside the coalition, with one government ally saying openly on Thursday that he was not the best person to head the center-right ticket.

His inability to oust Fazio, who has helped prompt the resignation of two of his economy ministers over the past two years, has underscored deep coalition rifts that have hobbled the government's effectiveness.

"Roman Circus," read a headline over an editorial in the Wall Street Journal Europe. "Fazio claims a scalp, but the coalition that has failed to oust him is left limping," wrote the Financial Times in an editorial.

In comments on a late night TV talk show on Thursday, Berlusconi, for the second time this month, said only the European Central Bank could dismiss Fazio -- "if it believes he has broken the law."

But a senior ECB official rejected the prime minister's contention, saying only the BOI's superior council could revoke his mandate by a two-thirds majority of its 13 members.

Berlusconi's divided government has not taken the unprecedented step of urging the superior council to oust Fazio. His cabinet met on Friday but did not discuss the issue.

Fazio has consistently denied wrong doing in his handling of a takeover battle that pitted Banca Popolare Italiana against Dutch lender ABN AMRO for control of Banca Antonveneta.

Although Fazio has been able to resist pressure to resign, he faces the uncomfortable prospect of being questioned by Roman magistrates investigating possible crimes in the Antonveneta takeover, judicial and legal sources have told Reuters.

The questioning, which would not imply Fazio is guilty but which could lead to charges, is expected in coming days.

(Additional reporting by Gavin Jones in Rome)

Source: REUTERS

More News in this Category