Italian Premier Silvio Berlusconi survived a confidence vote in Parliament on Friday, but his narrow majority raises doubts over his ability to govern effectively when the country needs a steady hand during its economic crisis.
Berlusconi's conservatives won in a 316-301 vote in Parliament's lower house. After days of tension, the premier's allies clapped when the result of the vote was announced.
Berlusconi has been weakened by sex scandals and criticized for his handling of Italy's economy. He has been facing repeated calls for his resignation from his political rivals, labor unions and parts of the business community that once considered him their savior.
Even some of his own allies have openly expressed disappointment, with at least two deserting the crucial vote Friday.
Had he lost the vote of confidence, Berlusconi would have been forced to resign — about 1 1/2 years before the end of his term, in 2013.
Three ratings agencies have downgraded Italy's public debt, citing the country's political gridlock and low growth prospects as key reasons. The vote Friday appeared to do little to reassure markets.
"The best signal that Italy could have sent to the markets would have been to boot Mr. Berlusconi out, but it has failed to do so," said Sony Kapoor, managing director of Re-Define an Economic Think Tank, shortly after the vote. "With Mr. Berlusconi still at the helm, there is nothing that Italy can do from within that will restore market confidence."
The 75-year-old leader has steadfastly hung onto power despite the scandals and four criminal trials in Milan. He has always maintained his innocence and blamed what he says are overzealous, left-leaning prosecutors bent on ousting him from power
He insisted that there is no alternative to his government. He said the vote Friday amounted to an "ambush" by the opposition, and moments after the vote, he spoke to reporters about his plan to spur the country's moribund economy.
Italy is under pressure to come up with growth-promoting measures to avert being dragged into the widening sovereign debt crisis.
This week, Central Bank chief Mario Draghi, who takes over the helm of the European Central Bank on Nov. 1, urged the government to act more quickly to implement reforms that can spur growth — beyond the austerity package that put Italy on the path to balance its budget by 2013.
Otherwise, Draghi warned that the rising cost of borrowing to service national debt seen over the last three months will eat up "no small part" of the austerity package approved by Parliament last month.
"The goal of relaunching growth is finally largely shared, but the adoption of the measures necessary so far have banged up against apparently insurmountable difficulties," Draghi said.
Copyright 2011 The Associated Press.