The right-wing People of Freedom (PdL) party of Silvio Berlusconi is threatening to pull its ministers and parliamentarians out of Italy’s government, which would bring down the coalition led by Enrico Letta (Democratic Party, PD). The new government has held power for just 100 days.

The threat by the PdL is in response to the conviction of Silvio Berlusconi. On August 1, Italy’s former prime minister was legally sentenced for the first time. The billionaire media tycoon transferred more than $350 million to foreign bank accounts to avoid paying tax during 2002 and 2003, when he was buying film rights for his Mediaset concern.

On Friday, the Supreme Court in Rome confirmed the sentence of four years for tax fraud, but rejected the second part of the sentence from the administrative court in Milan, which was a five-year revocation of his civil rights. A loss of his civil rights would have compelled Berlusconi to resign from all political positions.

The media hailed the conviction as a significant event, with Beppe Grillo even claiming it was “comparable with the fall of the Berlin Wall.” In reality, Berlusconi will never see the inside of a prison.

He was immediately relieved of three years of his four-year sentence, under an amnesty law passed by the Prodi government in 2006. The 77-year-old will also not have to serve a one-year term in prison. This is thanks to Anna Maria Cancellieri, who was appointed by former Prime Minister Mario Monti to the post of interior minister, and is now Letta’s justice minister.

Cancellieri is usually considered to be ruthless, at least when concerned with protesting workers or immigrants without papers. On July 1, just in time for Berlusconi’s sentencing, she introduced the “decreto Carceri“ (prison law) for “humanitarian” reasons. This allows for light sentences given to those over the age of 70 to be changed so as to include social work or house arrest.

The other two ongoing trials involving Berlusconi are the so-called Ruby case, concerning sex with an under-age girl and his abuse of public office, plus another trial over the bribery of parliamentarians. His lawyers have made a submission calling for the trials to be suspended or for a blanket punishment to be agreed, which would then be significantly reduced. The total sentence could end up being no more than a few months of house arrest, which Berlusconi will be able to spend in the comfort of one of his 20 luxury villas.

His lawyers view it as an encouraging sign that the Supreme Court chose neither to pass sentence on all of the three cases at the same time, nor to sentence him in the Ruby case first. In the Ruby case the judge would have had to confirm a sentence of seven years, far surpassing the upper limit for the prison law. As a result, there would have been practically no possibility of protecting the corrupt politician from prison time. In the end, the “red robes” of the judiciary, who Berlusconi demonised, saved him from a prison sentence.

The issue of whether he will have to leave his political positions is also yet to be determined. The decision has been postponed for the time being, and if it is confirmed, the senate would have to agree to his resignation, which is by no means certain. Berlusconi would then not be eligible for election for five years. He has already announced that during this time, he intends to rebuild Forza Italia, his party from the 1990s, from scratch.

His extremely mild punishment is due to the fact that Berlusconi is a vital component of the government. His PdL formed a coalition with the PD led by the PD’s Enrico Letta, who is the nephew of Berlusconi’s close supporter Gianni Letta.

Although Berlusconi is not a minister, nothing happens in the PdL without his involvement. His post as deputy prime minister has been assumed by Angelino Alfano, Berlusconi’s closest ally and former interior minister.

The two parties, which competed against one another for 20 years, have come together in the government in order to overcome an acute political crisis and continue the austerity course of the previous non-elected government headed by Mario Monti. In February voters decisively rejected all of the parties that support the austerity measures of the European Union (EU).

Immediately after Berlusconi’s conviction on Friday evening and in spite of the light sentence, there was uproar in the PdL with party representatives vowing to bring down the government.

Berlusconi called for support from his party colleagues, described the judiciary as “irresponsible” and the sentence as “damaging for democracy.” In a video message he asked dramatically, “Is this how Italy victimises its best citizens?” He demanded an immediate reform of the judicial system, indicating that otherwise he was ready for new elections.

Later, the PdL’s senators and parliamentary representatives went before the press with their resignation notices in their hands and called upon President Georgio Napolitano to pardon Berlusconi. Should he refuse to do so they were prepared to resign and bring down the government.

On Saturday, party leader Alfano confirmed in his capacity as deputy prime minister and interior minister, that the entire group of PdL ministers and parliamentarians were prepared to resign if Berlusconi was not given a reprieve. He called upon all of Berlusconi’s supporters to attend a protest demonstration in Rome on Sunday.

As the stock markets responded with sharp zigzags within a short period of time, several politicians worried about renewed turbulence and urged “calm.” “It would be dramatic if the government falls,” stated former Prime Minister Mario Monti to the Corriere dela Sera.

The PD is sharply divided, and Prime Minister Letta, who has been in power since April, has not succeeded in overcoming the crisis. His popularity dropped sharply after the formation of the government, not only because he continued with Monti’s austerity programme, but also because he governs with Berlusconi.

A growing section of the PD is supporting those who would like to see an end to the experiment of the Letta government. These forces are keen to get rid of the media boss and his unreliable mafia entourage, in order to be able to implement the austerity measures demanded by the banks unhindered.

A comment in the La Republica newspaper of August 2 wrote that the conviction of the leader of the PdL had brought about a new political situation. The comment said the Democratic Party was challenged to risk forming a government without the PDL. This was “a question of their identity,” and concerned “not only justice, but also the cleanliness of parliament and above all the character and quality of politics.”

Gugliemo Epifani, head of the Democratic Party and the former chief of the CGIL trade union, stated, “We are not bound to Berlusconi!” He called upon the senate to agree to Berlusconi’s resignation from all of his political posts.

Two years ago, the public hatred of Berlusconi’s corruption was used in a similar way to bring the “technocratic” government of Mario Monti to power. Since then, a drastic austerity drive lasting over two and a half years has been imposed in the interests of the Italian and European banks.

This has in no way changed with the Letta government, even though a property tax that had been imposed was temporarily stopped, as Berlusconi had promised this to his voters.

Banking and business circles have recently been intensifying their demand for Letta to adhere more strictly to austerity, although the recession in the country has intensified and debts have reached new heights of 130 per cent of GDP—more than 2 trillion euros.

The ratings agency Standard & Poors once again reduced Italy’s credit rating, and recently the Organisation for Economic Cooperation and Development (OECD) urged the Letta government to significantly reform the labour market. This is a euphemism for the demand to trample upon the social and democratic rights of the working class with even greater ruthlessness.

The working class is paying for the crisis and is being ever more openly driven in to poverty. The official unemployment rate stands at 12.2 per cent, and youth unemployment is approaching the 40 per cent mark. The increasing levels of suicides being reported in the newspapers testify to the horrific conditions of life for the working population.