Jan. 15 - New polls suggest Silvio Berlusconi's center-right coalition is making rapid gains ahead of next month's elections increasing the prospect of an unstable Italian government. How much damage could a Berlusconi resurrection inflict on the euro zone debt crisis? Sonia Legg reports.
The case of Ruby Heartstealer has been front page news in Italy this week. A court refused to halt a trial involving her and Silvio Berlusconi. But it seems the prospect of a sleazy courtroom drama hasn't dented the former Prime Minister's resurrection. His centre-right coalition party is making rapid gains in the polls ahead of next month's elections. And he's just made a new attack on the current leader Mario Monti, who's been implementing uncomfortable reforms. (SOUNDBITE) (Italian) SILVIO BERLUSCONI SAYING: "He deluded us, he was a 'bluff' and we all fell for it. I gave him my nomination as a Life Senator, and he didn't deserve that. We all hoped this gentleman was what he appeared to be but...Have you heard the phrase pied piper? He probably wants to tax my flute!" Monti wasn't elected - he took over from Berlusconi last year when Italy was on the brink of a Greek-style economic crisis. His reforms helped calm financial markets and he's now standing in February's election. His centre-left party is expected to win but if Berlusconi's popularity continues to rise he may not be able to form a stable government. That's making some investors nervous although Nick Beecroft from Saxo Bank isn't alarmed yet. (SOUNDBITE) (English): NICK BEECROFT SAXO BANK, SAYING: "Berlsuconi and the other right wing parties may form some form of coalition bringing together the Northern League and the Five Star movement, as well as Berlusconi's party - a coalition which might fight back harder against Berlin for instance. It might make the negotiations tougher, it might take a bit longer, but I think we have seen already, there's so much political will already to make this thing work that I think that is still the case." But Monti's critics say the current austerity measures are hurting the economy. And his predecessor - a billionaire media magnate - is doing his best to encourage them.