Italian court throws out Berlusconi immunity

Wed Oct 7, 2009

By Stephen Brown and Silvia Aloisi

ROME (Reuters) - Italy's top court ruled on Wednesday that a law granting Prime Minister Silvio Berlusconi immunity from prosecution violates the constitution, in a verdict that will reopen trials against him and may undermine his government.

"This is a politically motivated verdict but Prime Minister Berlusconi, his government and the coalition will continue to govern," responded Berlusconi's spokesman, Paolo Bonaiuti.

Analysts said the Constitutional Court's decision was bound to weaken 73-year-old Berlusconi and make reforms less likely as the third largest economy in the euro zone struggles to recover from its deepest recession since World War Two.

"Italy is in bad need of reforms to get the economy going and this makes those reforms even less likely because Berlusconi will be less inclined or able to focus on any reform effort," said Tito Boeri, an economist at Milan's Bocconi University.

Berlusconi's lawyers had warned that overturning the law would leave the prime minister so entangled in the courts that he would be unable to do his job properly.

His center-right allies have even threatened early elections if what they call "concentric attacks" on Berlusconi over his private life and business dealings continue, though the premier vowed earlier this week to serve out his full term until 2013.

Italy's business lobby was aghast at the idea of elections. "In a moment of crisis like this we need to manage a difficult situation and carry out reforms, and people would not understand us holding elections," said Confindustria's Emma Marcegaglia.

"PACK YOUR BAGS"

The Constitutional Court said the law passed last year soon after Berlusconi returned for a third term in power violates the principle that all citizens are equal before the law. It is also invalid because it was passed as a normal law rather than a constitutional reform, which is harder to approve, it said.

This is the second time the highest court in the land has thrown out Berlusconi's attempts to have immunity from the cases against him, after an earlier version was rejected in 2004.

The immunity also covered the president and two speakers of parliament but it was Berlusconi, who has faced corruption and fraud accusations linked to his Mediaset broadcasting empire, who had most at stake from losing it.

The opposition celebrated the verdict, with the anti-graft Italy of Values party saying: "Berlusconi would be well advised to pack his bags and get a change of air."

The "Alfano Law," one of Berlusconi's first acts after winning last year's election, halted all the cases against him, including one where he is accused of bribing British lawyer David Mills to give false testimony to protect his businesses.

Two other cases, one accusing him of tax fraud and false accounting in the purchase of TV rights by Mediaset and another alleging he tried to corrupt opposition senators, have also been frozen. Berlusconi denies any wrongdoing.

The prosecutors in those cases appealed to the Constitutional Court.

The ruling comes at a time when the premier's high approval ratings have been eroded by a series of sex scandals, including prostitutes attending parties at his home -- one of whom went public with some explicit recordings.

The center-right plans a mass rally in coming weeks to show solidarity with Berlusconi in the face of mounting opposition, which Berlusconi says has been orchestrated by the left-wing press in Italy and by biased Italian magistrates.

(Additional reporting by Paolo Biondi, Gavin Jones and Daniel Flynn; writing by Stephen Brown; editing by Janet McBride)