Italian Senate OKs Berlusconi's New Govt.

ROME – Premier Silvio Berlusconi's (search) new government won approval from the Italian Senate on Thursday, ending a government crisis that followed an embarrassing defeat in regional elections.

The confidence vote in the Senate (search) — won 170-117 by the premier's conservative coalition — was the last hurdle before the new Cabinet was fully empowered. It came after Berlusconi briefly resigned to reshuffle his government last week in a bid to end bickering among his allies.

In a 30-minute address to the Senate before the vote, Berlusconi vowed to carry out an economic platform that includes tax cuts for businesses and a new push to lift Italy's poorer south.

The lower house of parliament approved the government on Wednesday.

With elections just a year away, Berlusconi, a staunch U.S. supporter, still faces economic problems and fallout from the mistaken shooting death of an Italian intelligence agent by American forces in Iraq last month.

The March 4 killing of intelligence agent Nicola Calipari (search) at a U.S. checkpoint on Baghdad's airport road led to increased calls to bring home Italy's 3,000 troops from Iraq.

Calipari, who had just helped free kidnapped journalist Giuliana Sgrena, became a hero in Italy, where people strongly opposed the war in Iraq. Sgrena and another Italian agent who was driving the car survived the shooting.

Berlusconi did not mention the shooting in the Senate speech, but spoke extensively about the economy. He blamed much of Italy's economic woes on global trends and called on the European Central Bank to revise its monetary policy.

"The solution does not depend on a national government — it concerns the European Central Bank," he said. He took the bank to task for focusing on inflation and not doing enough to keep the value of the euro down — thus damaging European exports.

The bank's policy is "destructive for the competitiveness of all companies in Europe," said the premier.

Berlusconi has said he intends to lead Italy until elections in mid-2006.

He has faced opposition attacks over Italy's faltering economic growth and its fiscal deficit. The government has forecast 2.1 percent growth for this year, but it is expected to lower the figure soon.

The premier has put his government's prestige on the line with assurances to the nation that full light would be shed on Calipari's death. Any public finding seen to absolve the U.S. soldiers would likely undermine his credibility.

Both sides said this week they were still working on the final report of a U.S.-Italian investigation into the shooting. Italian and U.S. officials attached to the coalition force in Baghdad were trying to negotiate a document that could resolve the impasse, U.S. officials said.

On Wednesday, Berlusconi made a combative address in the lower house of parliament, where he pledged to boost the economy, accused the left of spreading pessimism and appealed to businesses' sense of patriotism by urging them to invest more in Italy.

When Berlusconi reluctantly resigned as premier last week, he ended Italy's longest-serving postwar government after four years. He swiftly formed a new Cabinet, hoping the reshuffle will stop bickering that threatened to blow apart his coalition.