Italy has finally formed a new government, a coalition of Silvio Berlusconi’s forces and centre-left rivals who forged an unusual alliance to break a two-month stalemate following inconclusive elections.

PRESSURE mounted on Italy’s Prime Minister Silvio Berlusconi to quit yesterday as six former parliamentary loyalists called for a new government and the squabbling cabinet failed to agree an urgent economic reform program.

Italian premier Silvio Berlusconi says his justice minister could succeed him as the conservative party leader, further signalling his intention not to seek re-election when his term ends in 2013.

Ministers have approved €24.3bn in budget cuts for 2011-2012 to protect Italy from the market speculation that pushed Greece to the brink of bankruptcy.

The Italian parliament today resumed voting to elect the country’s new president, but no winner was expected to emerge from the second round of voting as the two political coalitions still had not agreed on a candidate.

US forces in Iraq, already implicated in the killing of an Italian secret agent, faced further strains with allies yesterday when Bulgaria said they had probably shot dead one of its soldiers.

The pope confounded sceptics who had his obituary ready to roll today when he ate a hearty breakfast and silently joked with aides only hours after undergoing surgery to ease another breathing crisis.

Pope John Paul II is recovering in hospital today after being rushed from the Vatican in an ambulance and undergoing a throat operation to ease his breathing, following a recurrence of flu-like symptoms.