ITALY: The Italian Prime Minister, Mr Silvio Berlusconi, gathered his fractious coalition for a second day of crisis talks yesterday, urged by business leaders to end the political paralysis that has blocked key economic reforms.
Mr Berlusconi's supporters were confident his administration would pull through the biggest crisis of its three-year life, despite an icy stand-off between the prime minister and his unyielding centrist allies.
A first, four-hour session of negotiations broke up shortly after midnight without agreement following a reportedly harsh exchange of words between Berlusconi and the leader of the centrist UDC party, Mr Marco Follini.
"This is all your fault," participants quoted Mr Berlusconi as telling Follini at Sunday's meeting, blaming the UDC for pushing the government to the edge of collapse in a row over economic policy, distribution of power and constitutional reform.
Senior alliance officials resumed talks yesterday, with party leaders due to meet at 9 p.m. "We need a government that governs, not another two years of uncertainty and lack of strong decision-making," said Mr Luca di Montezemolo, head of Confindustria, the powerful business leaders' association. The next general election is due in 2006.
"We must all hope that a stronger government emerges in the coming days which can finally focus on industrial policy for the coming years," he said.
Industry Minister Mr Antonio Marzano said he was optimistic. "The constructive elements outnumber the negative ones. One can be hopeful about a positive conclusion."
A leading UDC politician also voiced cautious optimism that the many problems plaguing the centre-right coalition would be overcome. "We could wrap this up tonight," said Mr Luca Volonte, the parliamentary party leader of the UDC. However Mr Follini remained silent and was as determined as ever to wrest concessions from Mr Berlusconi, his entourage said.
Mr Follini sent Mr Berlusconi a letter at the weekend spelling out his terms for keeping the UDC in the government.
His demands have targeted the most sensitive parts of the government programme, including calls to moderate Berlusconi's tax cut plans and challenging another coalition ally, the Northern League, which wants to hand more power to the regions.
He is also seeking guarantees that state broadcaster RAI should be independent and clear of the influence of Mr Berlusconi, whose family controls Italy's biggest private media company.
Political sources said Mr Berlusconi told Mr Follini on Sunday that he would turn his television empire against the UDC if it pulled the plug on the government. The crisis sweeping the government was unleashed by last month's European and local elections in which Berlusconi's Forza Italia party lost ground to its three junior partners.
An earthquake measuring 5.2 on the Richter scale shook Slovenia and a large area of northeastern Italy yesterday, including the city of Venice. No injuries or damage were immediately reported.