Italy's Senate Approves New Law; Berlusconi Era Coming To End

Reuters is reporting that Italy's Senate has approved a new financial stability law, meaning that the tenure of Prime Minister Silvio Berlusconi is nearing an end.

The approval of the new budget law in the Senate now clears the way for final approval of a package of financial reforms in the lower house on Saturday - as well as the formation of an emergency government to replace Berlusconi.

The goal of the new package of austerity and reform measures is to boost economic growth and to put an end to the country's public debt problems. The measures were encouraged by European leaders as an effort to restore confidence in Italy's bond market.

Berlusconi, who lost his parliamentary majority in a vote on Tuesday, has said that he will step down from his post once the law is approved.

Looking at the new government, the FT noted Friday that there appears to be broad support in Italy for a "technical government" led by former Commissioner Mario Monti. However, another FT article pointed out Friday that while Monti has the support of the main opposition Democratic party, it may not be enough to give him the majority he needs to lead a new government.

The big area of uncertainty for Monti appears to revolve around Berlusconi' People of Liberty party. Bloomberg reports that following a meeting with Berlusconi on Thursday night,members of his party continue to be divided over whether to accept a Monti-led government or try to create a new People of Liberty-led government.

A decision on whether or not to support Monti was reportedly put off until Berlusconi officially resigns. There has been some discussion in the press that Berlusconi's party is ultimately likely to pledge its support for Monti in exchange for cabinet posts.

Stay tuned, this drama is not yet complete.

 

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