The flamboyant Italian Prime Minister Silvio Berlusconi has agreed to resign after the market in Europe crumpled spooked by the Greek crisis turned on Italy, focusing on factors that had existed for year stagnant growth and a debt mountain equal to 120% of GDP. After failing to secure the majority in a vote in the lower house, Berlusconi said he would quit as soon as parliament passed budget reforms urged by European partners to help Italy stave off a debt crisis that is threatening the euro zone.
Votes to pass the reforms in both houses of parliament are likely this month, and opposition leaders may try to bring this forward in order to end as soon as possible the flamboyant billionaire media tycoon’s 17-year dominance of Italy. Worries about the Berlusconi government’s ability to implement reforms to boost Italy’s sluggish growth and cut its huge debt have helped fuel a rise in Italy’s borrowing costs to unsustainable levels, weighing on the euro and stock markets.
The 75-year-old prime minister and his party say an election is the only realistic next step but opposition leaders have called for the formation of a national unity.
Report by Adhir Roy Chowdury