© Reuters/Remo CasilliItalian Prime Minister Silvio Berlusconi attends a news conference at Chigi palace in Rome August 12, 2011.
Scandal-plagued Prime Minister Silvio Berlusconi complained on Friday that constitutional constraints hindered his government from making major reforms as Italy came under mounting pressure in the euro zone debt crisis.
Lashing out at "communists" and an "anti-Italian" press and opposition, Berlusconi told a rally of young supporters in Rome that it was almost impossible to change Italy's deeply entrenched problems given limits on executive power.
"We have found it is extremely difficult to do anything concrete in a system that gives no power to the person who is in charge of the government," he said. "In all these years, I have felt a truly dramatic sense of impotence."
"We can hope -- hope, because there is no certainty -- that we can move ahead with reforms needed by the country," he said.
But he rejected as "laughable" suggestions that he should stand aside in favor of a government of non-political technocrats who could serve for a limited period to pass unpopular reforms.
"A technocrat would not have the authority. I don't see many technocrats around with the authority and the talent," he said.
In comments peppered with personal reflections on his lack of vices and regrets, Berlusconi pledged to carry on until the end of his term in 2013 but said he may not stand for re-election after nearly 20 years in politics.
The comments came as Italian bond yields, which have been contained by European Central Bank intervention over the past month, spiked sharply after reports that ECB board member Juergen Stark was resigning over his opposition to the policy.
The ECB's purchases of Italian bonds has been the only thing preventing Rome's borrowing costs spiraling out of control as market doubts have grown over whether Italy can keep control of its 1.9 trillion euro debt pile.
Italy, the euro zone's third largest economy, has moved firmly to the center of the crisis over the past two months as Berlusconi's fractious center-right coalition has dithered over measures to stimulate growth and cut its vast debt pile.
On Friday, Emma Marcegaglia, head of the main employers federation Confindustria made a pointed suggestion that the government should step aside if it could not address problems that were putting the future of Italy at risk.
"Our country is in danger," Marcegaglia said at an event in the Tuscan town of Chianciano Terme.
"Either the government shows very quickly that it is capable of mounting an operation that is both of large proportions and fair and which overcomes any vetoes or I think they should draw the consequences," she said.
Concern
Marcegaglia's comments reflect mounting concern over a crisis that risks tearing apart the whole euro zone, with market fears reflected in the growing premium investors demand to buy Italian bonds rather than benchmark German debt.
The Italian/German 10 year spread ended Friday at 371 basis points, compared with an equivalent Spanish/German spread of 343 points, as market concern over debt contagion switched from Spain to Italy.
While the ECB's intervention has offered Italy breathing space, Europe could not afford a full-blown bailout along the lines of the packages offered to much smaller countries like Greece or Ireland.
The ECB has demanded that Rome take urgent action to cut a public debt pile equivalent to 120 percent of gross domestic product, second only to Greece in the euro zone.
A 54 billion euro austerity package, aimed at balancing the budget by 2013, is going through parliament, with approval expected in the lower house some time next week following passage through the Senate on Wednesday.
However infighting between different factions and clear divisions between Berlusconi and Economy Minister Tremonti have led to the package being chopped and changed so frequently that its credibility has been damaged badly.
Italy's European partners have watched the weeks of political turmoil in Rome with undisguised incredulity and in the middle of the crisis, Berlusconi faces fresh accusations connected with a two-year old prostitution scandal.
Naples magistrates have been investigating allegations that he paid around 750,000 euros to a southern Italian businessman to hush up a prostitution affair dating back to 2009, adding an extra distraction to attempts to address the debt crisis.
Berlusconi is due to be questioned by magistrates as a witness next week but he dismissed questions from reporters on Friday who asked whether he was concerned by the case, saying simply: "No, why?"
He is not accused of any wrongdoing himself in the affair, which magistrates are treating as a case of extortion but it risks damaging his already battered standing as potentially embarrassing revelations appear in the press.
The truth.
The media makes all this turmoil look sort of sick and effete. But it's real. And the media does us no favor by rubbing our noses in it.
How about someone telling the truth for a change? That's what we need right now. That's what would get us somewhere. I wonder if the media would report the truth even if a real politician stood up and risked his life to tell it. Probably not. But I think the word might get out somehow...