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Italy crisis: Senate to vote on austerity measures | Italy crisis: Senate to vote on austerity measures |
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The Italian senate is holding a debate - followed by a vote - on austerity measures designed to avoid a bailout of the eurozone's third largest economy. | |
The measures are likely to be approved, with the lower house voting at the weekend and paving the way for Prime Minister Silvio Berlusconi to resign. | |
A technocrat government possibly led by former EU commissioner Mario Monti is being debated. | A technocrat government possibly led by former EU commissioner Mario Monti is being debated. |
On Thursday, Italy raised 5bn euros (£4.3bn) from new government bonds. | On Thursday, Italy raised 5bn euros (£4.3bn) from new government bonds. |
But this was at an interest rate of 6.087% to borrow the money for one year. | But this was at an interest rate of 6.087% to borrow the money for one year. |
The upper house is due to begin its debate on the austerity law at 09:30 GMT (10:30 local time), with a vote expected in the evening. | The upper house is due to begin its debate on the austerity law at 09:30 GMT (10:30 local time), with a vote expected in the evening. |
Mr Berlusconi, who lost his parliamentary majority in a vote on Tuesday, has promised to resign after the austerity measures are passed by both houses of parliament. | Mr Berlusconi, who lost his parliamentary majority in a vote on Tuesday, has promised to resign after the austerity measures are passed by both houses of parliament. |
Nervous markets | Nervous markets |
Italy's leaders are desperate to signal that they can bring the country's finances under control, says the BBC's Alan Johnston in Rome, and they are moving fast. | Italy's leaders are desperate to signal that they can bring the country's finances under control, says the BBC's Alan Johnston in Rome, and they are moving fast. |
Mr Monti, a well respected economist, is exactly the sort of man that the money markets would like to see take charge at this time of crisis, our correspondent says. | Mr Monti, a well respected economist, is exactly the sort of man that the money markets would like to see take charge at this time of crisis, our correspondent says. |
The austerity package foresees 59.8bn euros in savings from a mixture of spending cuts and tax rises, with the aim of balancing the budget by 2014. Measures include: | |
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The Italian president has made Mr Monti a senator for life, meaning he will be eligible to take part in Friday's vote. | The Italian president has made Mr Monti a senator for life, meaning he will be eligible to take part in Friday's vote. |
President Giorgio Napolitano said he wished to "dispel any doubt or misunderstanding" on when Mr Berlusconi would fulfil his promise to resign. | President Giorgio Napolitano said he wished to "dispel any doubt or misunderstanding" on when Mr Berlusconi would fulfil his promise to resign. |
If the lower house completes its vote on Saturday, President Napolitano could accept Mr Berlusconi's resignation as early as Saturday evening. | If the lower house completes its vote on Saturday, President Napolitano could accept Mr Berlusconi's resignation as early as Saturday evening. |
He could then formally ask Mr Monti or another candidate to form a government of technocrats. | |
On Wednesday, the interest rate on 10-year Italian government bonds touched 7%, the rate at which Greece, Ireland and Portugal were forced to seek bailouts from the EU. | On Wednesday, the interest rate on 10-year Italian government bonds touched 7%, the rate at which Greece, Ireland and Portugal were forced to seek bailouts from the EU. |
An EU team has begun work in Rome, monitoring how Italy plans to cut its crushing debt burden, 120% of annual economic output (GDP). | An EU team has begun work in Rome, monitoring how Italy plans to cut its crushing debt burden, 120% of annual economic output (GDP). |
The Italian economy has grown at an average of 0.75% over the past 15 years. | The Italian economy has grown at an average of 0.75% over the past 15 years. |