Berlusconi forms government to end crisis

Italian premier Silvio Berlusconi has formed a new government in a bid to cling to power before elections next year.

Italian premier Silvio Berlusconi has formed a new government in a bid to cling to power before elections next year.

But it will face the same problems as his last one - a sluggish economy and public discontent with Italy's presence in Iraq.

Mr Berlusconi was sworn in yesterday by President Carlo Azeglio Ciampi as head of the nation's 60th government since 1945.

His team of ministers differs little from the one he led until quitting Wednesday, prompting the centre-left opposition to brand the reshuffle mere "propaganda."

READ MORE

Still, Berlusconi announced the creation of a new ministry - Development and Territorial Cohesion - under Gianfranco Micciche, the former deputy minister of economy.

Mr Micciche, who is from Sicily, will oversee efforts to develop poorer areas in southern Italy. "A new phase is starting, and the next Cabinet meeting will indicate this government's programme: southern Italy, support for businesses and buying power for families," Mr Berlusconi told ministers, according to the ANSA news agency.

Resigning and forming a new Cabinet is a manoeuvre that Mr Berlusconi, a billionaire mogul who likes to portray himself as a new-style politician, had originally dismissed as an old trick of Italian politics.

But after the conservative National Alliance - his major coalition ally - threatened to withdraw from the government, it appeared to be Berlusconi's last chance to stay in office.

Ministers who are staying include National Alliance chief Gianfranco Fini, who remains foreign minister and deputy premier, as well as Defence Minister Antonio Martino, who oversees Italy's deployment of 3,000 troops to Iraq.

Giulio Tremonti, a former economy minister forced out last year by coalition feuding, returns as a deputy premier. The Cabinet will face a parliamentary confidence vote next week. Berlusconi is expected to win it because his centre-right coalition still has a majority in parliament.