Allies of Silvio Berlusconi are chalking up the government's decision to scrap the controversial IMU property tax Berlusconi opposed as a victory for the former prime minister's continuing influence. But some analysts say the development may actually weaken Berlusconi's hand going forward.

The IMU tax, which puts a levy on primary residences, was put in place last year by then-Prime Minister Mario Monti over great public resistance. It would add an estimated 8 billion euros (10.56 billion U.S. dollars) per year to the coffers of the cash-strapped Italian government, but was also seen as a drag on the economy and a heavy economic burden for middle class Italians.

In February's national elections, Berlusconi ran on a platform of repealing the IMU tax, and he continued insisting even after he took a key role as a junior member of the coalition supporting current Prime Minister Enrico Letta. Berlusconi threatened to make the government collapse if Letta did not withdraw the tax.

Earlier this month, Italy's Supreme Court upheld a conviction for false accounting and tax evasion against Berlusconi, a billionaire media tycoon. He was ordered to serve a year of house arrest (likely to begin in October), and he faces a ban from politics. The initial commentary was that the government's decision to remove the tax this year was a major victory at a time when many speculated that Berlusconi's power could be on the wane as a result of his conviction and other pending legal issues.

There is little doubt that Berlusconi and his allies in parliament successfully demonstrated their political muscle by pushing through the change. But the development did something else -- it robbed them of their main battle cry.

Next up for the government is a vote, tentatively scheduled for Sept. 9, on whether or not to allow to keep his Senate seat. If Berlusconi had made the government fall based on his opposition to the IMU tax, it would have at least been in line with long opposition to levy. But if he does so after being voted out of the Senate it will seem he got his way on the property tax and then conjured up a crisis based entirely on his legal problems.

If that happens it could make it much more difficult for him (or an anointed deputy) to win support in an election that could follow any government collapse.

"Berlusconi is weaker now; he's got one less card to play," said Giovanni Orsina, deputy director of the LUISS University School of Government in Rome. "Berlusconi's game plan is much more difficult now."

That does not mean Berlusconi will fade away. In a 20-year political career, Berlusconi has repeatedly confounded critics. But now, any political maneuver will be against a newly strengthened Letta government, which can claim credit for repealing an unpopular tax as well as for further bolstering the country's budding economic recovery through tax relief. Endit

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