Silvio Berlusconi has had his worst week since he became prime minister of Italy four years ago. His economy minister Domenico Siniscalco resigned on Thursday over the cabinet's failure to force the governor of the country's central bank, Antonio Fazio, to resign over a takeover scandal. This was reinforced when Mr Fazio stayed put even when Mr Berlusconi said he should go. It was made risible in a remark made yesterday by the new economy minister Giulio Tremonti about him.
All of this has drawn international attention to the economic and political issues behind this turmoil. They certainly do not put Italian public affairs in a good light. Mr Siniscalco said he is not embittered but scandalised by them. Relations between him and Mr Fazio had deteriorated so much that Mr Siniscalco could not face the prospect of representing Italy with him at this weekend's G7 and IMF meetings in Washington. When he got there yesterday Mr Tremonti, an old adversary of the central bank governor from the time when he was previously economy minister from 2001-3, said ironically of him: "If you don't go away, I'll have you roughed up a bit."
Mr Siniscalco, a non-party academic, was brought into the government last year to lend it international credibility during a difficult period. State indebtedness stands at 120 per cent of gross domestic product, while the annual deficit is running at over 4 per cent and could reach 6 per cent next year - twice the limit imposed by the Stability and Growth Pact governing euro-zone economies. Mr Siniscalco was in the final stages of preparing next week's budget in which he proposed steep expenditure cuts to fix the deficit by bringing it down to 3.8 per cent. They were rejected by several parties in the coalition, just as was Mr Fazio's resignation.
It looks as if the spenders have won the budgetary argument ahead of elections which must be held by June next year. This would put Italy squarely at odds with Brussels in a contest which could have serious implications for the stability of the euro. The currency is under pressure from political events in Germany and France, whose economies are also facing difficulties meeting the deficit and indebtedness criteria as they struggle with economic reforms to encourage growth and jobs.
Mr Berlusconi is substantially behind the opposition centre-left coalition led by Mr Romano Prodi in the latest opinion polls. Holding the government together much longer will be a huge task. It is widely seen as a political meltdown - "Time's up" read the headline in Corriere della Sera, which said it deals a final blow to Mr Berlusconi's credibility. It is difficult to disagree with this verdict.