ROME, July 6 (Reuters) - Personal setbacks, plummeting polls, an unpopular austerity budget and bickering in his coalition have left Italian Prime Minister Silvio Berlusconi more vulnerable than he has been since he won election in 2008.
Berlusconi is to seek a confidence vote in the lower house Chamber of Deputies for the 25-billion-euro austerity budget, in a sign he has to whip his coalition into line.
Here are scenarios for how the next few weeks could shape up:
A PAINFUL, DIVISIVE AUSTERITY BUDGET
The government announced on July 5 it would seek a confidence vote in the Chamber of Deputies to push through the budget, which even the opposition says is needed to help get Italy’s deficit in order and avoid a Greek-style crisis.
The deficit last year was at 5.3 percent of GDP and is targeted at 5.0 percent of GDP this year.
But Berlusconi has been assailed from all sides, including from within his coalition, on how the cuts have been meted out. Workers say the budget bleeds them while sparing the rich. Local authorities say they will not be able to provide proper health and education services.
Berlusconi’s own centre-right parliamentarians, catering to their constituents, have proposed some 1,250 amendments to make the blow softer to local voters. Berlusconi says it needs to be rammed through quickly "for the common good".
Commentators say the confidence vote is an attempt to force party dissenters to vote yes in a public ballot because if the government loses, they will be responsible for its collapse. The government will win the vote but the malaise will linger.
A SUMMER TRUCE
Although it is suffering from low opinion poll ratings and the loss of two ministers tainted by corruption in as many months, the government will almost certainly survive the summer, although, as Berlusconi’s right-hand man Gianni Letta put it, "the season is sizzling and not just because of the weather."
What September will bring is not clear.
"Berlusconi is facing internal opposition which if not defeated or safely corralled, could bring the government down," said James Walston, political science professor at the American University of Rome.
A showdown is shaping up between Berlusconi and Gianfranco Fini, the speaker of the lower house and co-founder with Berlusconi of the People of Freedom coalition party.
Fini, who has often criticised a lack of freedom of speech in the party, is opposed to Berlusconi’s attempt to rush through a law that would limit the use of wiretaps by police and punish media that publish them.
Commentators say a situation where the top two coalition leaders avoid being in the same room and insult each other when they are cannot go on much longer.
A LEAGUE APART
The other main component of the coalition, the Northern League, is unhappy as the austerity budget will cut resources to regions. One of the League’s battle cries has been the right to have more say in how national taxes are spent locally for services such as education and health.
"The Northern League does not want to bring home the grand prize of federalism only to find they have no money to implement it and have to raise regional taxes to maintain the same level of services," Walston said.
Berlusconi cannot forget that it was the League’s leader, Umberto Bossi, who felled his first government in 1994.
NEW ALLIANCE?
Commentators say the smart and ambitious Fini, who controls about 50 seats in parliament, may be quietly preparing a "Third Way" that would pit his own alliance against whatever is left of Berlusconi’s People of Freedom coalition and the leftist opposition led by the ex-communist Democratic Party.
Analysts say Fini will wait for the right moment, when Berlusconi is even weaker than he is now.
His alliance would include Fini loyalists, other disaffected conservatives, a Catholic party headed by former house speaker Pierferdinando Casini, a centrist movement headed by former Rome mayor Francesco Rutelli and high-profile business leaders headed by former FIAT president Luca Cordero di Montezemolo.
