Italian Senate Approves Financial Reforms

Posted November 11th, 2011 at 9:25 am (UTC-5)
Leave a comment

The upper house of the Italian Parliament has approved austerity measures and other reforms designed to help the country out of a financial crisis.

If the reforms passed by the Senate are also approved by the lower house of Parliament on Saturday, Prime Minister Silvio Berlusconi has said he will resign and clear the way for a new government to appease international investors and the EU.

The changes to Italian law are aimed at controlling a $2.6 trillion public debt and boosting the economy.

EU leaders and investors had worried that without Italian action, the third-largest eurozone economy would need an international bailout that would be much more expensive than those already provided to Greece, Ireland and Portugal.

In Greece Friday, Lucas Papademos is set to be sworn in as interim prime minister as head of a coalition government that hopes to rescue that country from a deep financial crisis.

Mr. Papademos is expected later Friday to name his Cabinet, which is thought to include many of the same key ministers from the outgoing administration of George Papandreou, who resigned midway through his four-year term.

The transition government will implement deeply unpopular budget cuts required by European leaders in order to secure the next installment of a rescue package that would keep Greece from going bankrupt within weeks.

In Italy, Mr. Berlusconi’s most likely successor is former European Union Commissioner Mario Monti, who was named Wednesday by Italian President Giorgio Napolitano as “senator for life,” a move widely seen as a precursor to Monti being appointed as prime minister.

But Mr. Napolitano cannot appoint a new prime minister until Mr. Berlusconi follows through on his promise to resign, and many investors fear that the 75-year-old may once again try to retain his position.