Berlusconi wins EU court case

Italy's Prime Minister Silvio Berlusconi won a surprise victory yesterday when the European Union's top court said EU law could not overrule an Italian law which critics say was tailor-made to protect him.

The law partially decriminalising false accounting was introduced by Mr Berlusconi's government in 2001 when it came into power. It forced a Milan court to halt a corporate corruption trial which involved the Prime Minister - prompting opponents to say he was legislating himself out of trouble.

Milan prosecutors asked the European Court of Justice in 2002 whether the law was in line with an EU directive on company law. But even though the ECJ's top legal adviser found problems with the Italian law, the court ruled in Mr Berlusconi's favour.

"A (EU) directive cannot - by itself and independently of national legislation adopted by a member state for purposes of its application - have the effect of determining or increasing the criminal liability of an accused person," the court said.

The ECJ said it was up to member states to fix penalties for false accounting and that the directive could not be directly applied to individual cases such as the one against Mr Berlusconi.

The Luxembourg-based court also said it was up to Italian courts to decide whether the penal sanctions in the law, which shortened the statute of limitations for false accounting cases, were "effective, proportionate and dissuasive".

The ECJ's advocate-general, Juliane Kokott, had argued that the law introduced too ample a margin of discretion for defining criminal charges of false accounting. The court follows the advocate-general's opinion in 80 per cent of cases.