Berlusconi set to resign as Italian parliament mulls €60bn austerity plan

The Italian prime minister is expected to resign once the lower house passes the austerity plan aimed at reduced pressure on both Italy and the eurozone.

THE ITALIAN PARLIAMENT’S lower house is meeting today to vote on a raft of austerity measures aimed at easing pressure on the eurozone’s third-largest economy as well as the single currency.

Today’s meeting and vote are also expected to pave the way for Prime Minister Silvio Berlusconi to step down and allow the formation of a caretaker government likely to be led by former EU Commissioner and economist Mario Monti.

Monti was last week given the rare and unexpected honour of being named a senator for life, further indicating that he is a strong contender to take over from the embattled Berlusconi.

Berlusconi could resign as early as this afternoon if the austerity plan passes.

The €60 billion reform package being pushed by the EU aims to curb Italy’s public spending while raising funds through increased taxation. The retirement age is being raised from 60 to 65 and limits are being introduced on cash transactions to crack down on tax evasion.

The measures were passed by the senate yesterday by 156 votes to 12, suggesting that it should easily pass the lower house vote today.

After meetings in Tokyo today, IMF chief Christine Lagarde said that the success of Italy’s financial reform could ease pressure on the wider eurozone debt crisis and that the country needs to implement “steady, solid and sustained” measures to restore credibility and confidence.

World markets rallied yesterday upon news that the austerity measures were likely to pass and that Monti could be the next Italian leader.

- Additional reporting by the AP

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