Italy’s Chamber of Deputies will vote finally to approve debt-reduction measures on Saturday in an attempt to prove its ability to pay to investors and pave the way for Prime Minister Silvio Berlusconi’s resignation.
Berlusconi promised to step down once the measures he had promised to the European Union are adopted in a session starting at 17:00 IST, after market turmoil started doubting that Italy could drag Europe into an unprecedented crisis.
A cabinet meeting at which Berlusconi could announce the resignation is due to start at 12:30 p.m. Rome time. Then the prime minister can finally formally submit his resignation to Italy’s head of state, Giorgio Napolitano.
Berlusconi’s decision would be “a major step in the right direction, containing the measures to put Italy back on track and, when implemented, to start regaining the necessary credibility,” Herman Van Rompuy, EU President, said in yesterday outside Florence, Italy. “Implementation is absolutely crucial.”
Berlusconi’s resignation may lead to the formation of a new government headed by former European Commissioner Mario Monti. Monti is expected to head a technocratic government to push through reforms in an effort to drag out the country from its economic crisis.
President Napolitano and Italian legislators have speed up the process to prompt healthy reactions from the stock and bond markets. The Italian President has received approval from European heads of state, such as French President Nicolas Sarkozy and German President Christian Wulff.
In telephone calls on Friday, they all agreed that the new measures must be brought into effect quickly because the situation in Italy was extremely dangerous for all of Europe and particularly the euro zone.
“If they manage to get their problems under control the situation could stabilize,” said Heinrich Bayer, an economist at Deutsche Postbank in Bonn, Germany. “Italy has the potential to weather the turmoil but they’ve already wasted a lot of time. They need to act now.”
Mario Monti is respected economist, has been favored by markets for weeks to lead Italy out of the crisis.
“Monti is clearly in favor of quick implementation of labor-market reforms,” which “should help boost Italy’s productivity and potential growth,” Annalisa Piazza, an economist at Newedge Group in London. “Monti also backs a more efficient tax system that could reduce company and labor-market levies and increase the value-added tax”.
Alrhough Berlusconi would be supported by most centrists and the huge opposition force, the Democratic Party, there is substantial opposition in Berlusconi’s existing coalition.
Berlusconi was noticed at the Italian scene in 1994 and has led three governments in 17 years.
His third and last term in power, which started in 2008, is considered to be the most scandal plagued.
His second wife divorced Berlusconi in 2009, having accused him of frequenting minors.
Soon Italian newspapers started revealing spicy stories about parties with young women at his luxurious residences in Rome, Milan and Sardinia.
In spite of all this rumors, ordinary Italians feel upset about the demise of Berlusconi, it is shown in latest polls giving him an approval rating of just 22 per cent, but he did earn at least one tribute from counterpart and friend Vladimir Putin.
The Russian prime minister and probably future president stated Berlusconi as “one of Europe’s greatest politicians”, referring to him as “one of the last Mohicans”.