14 Nov 11 Berlusconi to quit; Italy OK’s reforms

Rome, Italy (AHN) – Italy’s lower house of parliament approved a series of austerity measures on Saturday paving the way for the resignation of Prime Minister Silvio Berlusconi.

The package, demanded by euro zone leaders to shore up confidence in the financially strapped country, was passed by a vote of 380 for to 26 against.

Approved by the Senate on Friday, the passage, which includes pension reform with plans to raise the retirement age to 67 from 65, the privatization of state-owned companies and the sale of state owned properties, sent markets surging.

Berlusconi has survived numerous sexual and ethic scandals in the past. But Italy’s financial woes will end his reign. The Prime Minister vowed to step down once the measures were approved in both houses of parliament after losing his majority.

Italy is the fourth largest economy in Europe. A financial meltdown in the “Boot” would have a dramatic impact on global markets and could cause massive ripple effects worldwide.

Berlusconi could resign as early as Saturday night.

Italy’s borrowing costs eased somewhat Friday after rising above 6.75 percent Wednesday. Yields on the Italian 10-year bond were trading at 6.5 percent at the close of trading Friday. Keeping yields below 7 percent is imperative. That is the level that led to eventual bailout for Ireland, Portugal and Greece.

Italy is currently the biggest bond issuer in Europe. While the country is considered too big to fail, it may also be just too big to bail out.

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