Italy's Premier Resigns

(CBS/AP)  Premier Silvio Berlusconi handed the president his resignation Wednesday and pledged to form a new government to strengthen his coalition, which has been weakened by a sluggish economy and opposition to Italian involvement in Iraq.

Berlusconi has been under increasing pressure from his coalition allies, after suffering a stinging defeat in local elections earlier this month, reports CBS News Correspondent Sabina Castelfranco. He faced his worst political crisis in four years when two parties backing his government decided to withdraw their support.

Berlusconi's four-year-old government has been the longest-serving one in Italy since the Second World War.

President Carlo Azeglio Ciampi's office said in a statement that Berlusconi had tendered the resignation of his Cabinet, and added the government would stay on as caretaker.

Earlier, Berlusconi had addressed the Senate and told the country of his plan to step down and form a new government and platform.

It is now up to Ciampi to designate a candidate to assemble a new government, or else dissolve parliament and call early elections. Ciampi, who begins formal political consultations Thursday, is expected to give Berlusconi the mandate to form a new Cabinet.

"The regional elections showed a clear sign of discomfort," Berlusconi said in his Senate address. "I want to give an adequate political response."

Government partners "have all demanded a new government, to be based on the same coalition," Berlusconi said. "I accept this challenge."

Berlusconi said he was confident a new government would relaunch the center-right coalition ahead of next year's general election.

Berlusconi has been struggling to hold his 4-year-old government together, and a senior coalition partner threatened Tuesday to quit the government in a further setback for the premier.

The National Alliance party said it would still support the center-right coalition but that the continued participation of its ministers, whose letters of resignation were ready, "depends solely on what Berlusconi will say and do."

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