The court ruled that the measure, supported by Berlusconi's center-right Forza Italia, is unconstitutional because it violates the principle that everyone is equal before the law.
The immunity law exempts from prosecution the holders of five top offices -- namely, the state president, the prime minister, the presidents of the two parliamentary chambers, and the head of the constitutional court.
The many critics of the prime minister contend that the immunity law was conveniently passed to stifle the bribery case before it came to a verdict. They have accused Berlusconi of degrading the institutions of state for his own convenience.
Speaking yesterday, center-left leader Francesco Rutelli called the court decision a "positive" development, and said Italy's constitutional court "showed the freedom, independence, ability to decide in a very, very critical moment of our institutional democratic life. So, we are very respectful today and we think that the decision is the confirmation of the independence of our constitutional institutions -- they worked, and they worked well."
Berlusconi denies wrongdoing and asserts he is being hounded by left-wing magistrates on political grounds. Lawyer and Forza Italia deputy Carlo Taormina said the judiciary is out to get the prime minister, adding that they are making a "mistake."
"This doesn't surprise me," he said. Those "who think that justice in the political sphere has been put to one side without making necessary reforms are making a mistake -- and continue to make a mistake."
The way is now clear for the bribery case to resume in Milan, but there is no word when it will do so. This is the second legal setback for the prime minister in as many months.
Last month, state President Carlo Azeglio Ciampi declined to sign into law a government-backed media measure. Critics said the measure would enable Berlusconi to strengthen his domination of the Italian media scene. Ciampi obviously agreed with the critics, as he sent the measure back to parliament for review.
A senior analyst at the Center for European Integration at Bonn University, Peter Zervakis, says the ruling is a "blow" for the Italian prime minister. Zervakis says it has been Berlusconi's tactic to portray himself -- through his own powerful media outlets -- as a victim rather than as a perpetrator.
"Berlusconi has behaved like a prima donna since he became prime minister for the second time; he has tried to gain legitimacy by portraying himself as engaged in a 'heroic struggle' with left-wingers in the legal system, he has tried to present himself as the subject of a 'witch hunt' by the Italian courts."
But Zervakis believes this tactic will not work as well for the prime minister in the future as it has in the past: "For months I see that public opinion polls are showing that the [Italian] public is 'sobering up' towards Berlusconi. He has not been successful, he has not succeeded with his political promises to bring recovery to Italy and to solve unemployment problems; and in fiscal matters, in social security, nothing has been done."
Therefore, says Zervakis, he believes Berlusconi will have a hard time trying to present himself again as a credible candidate for government leader in the elections later this year.
In those elections, Berlusconi is expected to face a formidable opponent in the form of current European Union Commission President Romano Prodi. Prodi, a left-leaning liberal, will be leaving his Brussels post on completion of his term and is expected to contest the Italian parliamentary elections.
Berlusconi is widely seen as having done badly as leader of the just-ended Italian presidency of the EU. That -- coupled with his domestic political failures, and now the added burden of renewed legal challenges -- will all supply Prodi with ammunition against his old rival.