Italian Prime Minister Silvio Berlusconi will face a confidence vote in parliament that may topple his government and lead to elections two years before the end of his term.

The vote will be held in both houses of parliament on Dec. 14, after the legislature passes the government’s 2011 budget plan. President Giorgio Napolitano announced the timetable late yesterday after meeting parliamentary leaders in Rome to discuss the country’s political crisis.

Berlusconi’s grip on power has been slipping since Gianfranco Fini, co-founder of the ruling People of Liberty party, broke with the premier in July. Fini this month demanded that Berlusconi resign, and may have enough backers for his new Future and Liberty for Italy party in the Chamber of Deputies to deny Berlusconi a majority and bring down the government.

“This is no way to run a country,” Fiat SpA Chief Executive Officer Sergio Marchionne said yesterday in Los Angeles after the announcement. “The lack of clarity creates nervousness and the instability doesn’t help things.”

The political turmoil occurs as investors shun the debt of the euro-region’s so-called peripheral nations on concern that Ireland’s squabbling with the European Union over emergency aid will spread the region’s debt crisis.

http://www.bloomberg.com/news/2010-11-16/berlusconi-to-face-confidence-vote-that-may-lead-to-early-elections.html