Berlusconi loses libel suit against the Economist (Reuters)

ROME (Reuters) - Prime Minister Silvio Berlusconi lost a defamation suit he brought against The Economist magazine over a 2001 cover story that accused him of being "unfit to lead Italy," the British publication said on Friday.

Berlusconi, one of Italy's richest men, was ordered by a Milan court to pay the magazine's legal costs of 25,000 euros ($35,760) after a Milan court rejected his libel claims.

The Economist's April 26, 2001, edition ran a front page photo of the media mogul with the headline: "Why Silvio Berlusconi is unfit to lead Italy."

It accused him of having conflicts of interest, analyzed his business empire and detailed trials against him, in an issue which came out just ahead of elections that Berlusconi won.

"They (The Economist's arguments) fully fall within the right to criticize, which is guaranteed by Article 21 of the constitution," Milan Judge Angelo Ricciardi wrote, in a copy of the ruling provided to Reuters by The Economist.

Berlusconi's attorney in the case could not be immediately reached for comment.

The ruling is likely to do little to soften the conservative billionaire's frequent criticism of both the media and Italian judges, who he claims have unfairly targeted him since he entered politics in the early 1990s.

The Economist has repeatedly launched broadsides against Berlusconi, whose business empire spans television, publishing, film and top flight soccer team A.C. Milan.

Just before he narrowly lost his bid for re-election in 2006, the magazine ran a cover story saying "Basta, Berlusconi" ("Enough, Berlusconi"). When snap polls approached in April 2008, it told voters Berlusconi was "still unfit" to lead Italy.

The magazine accused the conservative billionaire in July of using his third term as prime minister largely to pursue his "personal and corporate interests."

The headline was "Berlusconi fiddles, Italy burns" and displayed a caricature of him in the likeliness of Roman emperor Nero.

"There is no hint of debate on the liberalizing measures that Italy's hidebound economy badly needs," it wrote.

Italy's economy shrank by 0.3 percent in the second quarter of the year compared with the first, and Economy Minister Giulio Tremonti has said growth will be "around zero" in 2008.

(Editing by Robin Pomeroy and Mary Gabriel)