But the main Italian index, the FTSE MIB, recovered earlier losses after reports emerged that Mr Berlusconi may resign "within hours" - since denied by the prime minister, according to the ANSA news agency.
At midday, the FTSE MIB was up 1.5%.
Concerns over Italy are overshadowing developments in Greece, where Prime Minister George Papandreou has agreed to stand down.
Mr Papandreou sealed a deal with the opposition to form a new coalition government to approve an EU-IMF bailout package.
Once the vote has been passed, it will open the way for Greece to receive the next 8bn euro tranche of bailout loans.
The deal was welcomed by investors, with the main Athens bourse up 2%, lifted by the banking sector. Shares in Alpha Bank were up 7.8% while Hellenic Postbank rose 11.4%.
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