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Italy's Berlusconi to quit after austerity law vote Italy's Berlusconi to quit after austerity law vote
(40 minutes later)
The lower house of Italy's parliament has passed a package of austerity measures demanded by the EU and designed to restore markets' confidence in the country's economy. Italy's Prime Minister Silvio Berlusconi is meeting President Giorgio Napolitano to submit his resignation.
The vote paves the way for Silvio Berlusconi to resign as prime minister. He has gone to meet the president. It comes after the lower house of Italy's parliament has passed a package of austerity measures demanded by the EU and designed to restore markets' confidence in the country's economy.
A technocrat government led by ex-EU commissioner Mario Monti seems likely.A technocrat government led by ex-EU commissioner Mario Monti seems likely.
The austerity package includes a rise in VAT and the pension age, rising fuel prices and the sale of state assets.The austerity package includes a rise in VAT and the pension age, rising fuel prices and the sale of state assets.
Mr Berlusconi, who lost his parliamentary majority in a vote on Tuesday, promised to resign after the austerity measures were passed by both houses of parliament.Mr Berlusconi, who lost his parliamentary majority in a vote on Tuesday, promised to resign after the austerity measures were passed by both houses of parliament.
Members of the lower house voted 380-26 with two abstentions, after the Senate approved the measures easily on Friday. President Giorgio Napolitano later signed the bill. Members of the lower house voted 380-26 with two abstentions, after the Senate approved the measures easily on Friday. President Napolitano later signed the bill.
After accepting Mr Berlusconi's resignation, Mr Napolitano could then formally ask Mr Monti or another candidate to form a government of technocrats.After accepting Mr Berlusconi's resignation, Mr Napolitano could then formally ask Mr Monti or another candidate to form a government of technocrats.
Italy is fast approaching a moment of profound political change. With the economic reforms having just been passed into law, Mr Berlusconi's expected to step down imminently. And now Italians are watching to see how exactly he'll play out his final moments in power.Italy is fast approaching a moment of profound political change. With the economic reforms having just been passed into law, Mr Berlusconi's expected to step down imminently. And now Italians are watching to see how exactly he'll play out his final moments in power.
It's thought that after his last cabinet meeting he'll make his way to the residence of the country's President, Giorgio Napolitano, and submit his resignation there.It's thought that after his last cabinet meeting he'll make his way to the residence of the country's President, Giorgio Napolitano, and submit his resignation there.
In the days ahead it's widely believed that the well-respected economist, Mario Monti, will be asked to form a government. He's expected to try to reform the economy quite radically, and he has support from many quarters. But a leading newspaper columnist, Massimo Franco, says Mr Monti would require substantial cross-party parliamentary backing if he's to be effective.In the days ahead it's widely believed that the well-respected economist, Mario Monti, will be asked to form a government. He's expected to try to reform the economy quite radically, and he has support from many quarters. But a leading newspaper columnist, Massimo Franco, says Mr Monti would require substantial cross-party parliamentary backing if he's to be effective.
"We thank Berlusconi for what he has done for all these years," said Fabrizio Cicchitto, an MP from the prime minister's People of Freedom Party."We thank Berlusconi for what he has done for all these years," said Fabrizio Cicchitto, an MP from the prime minister's People of Freedom Party.
Opposition MP Dario Franceschini welcomed his expected resignation.Opposition MP Dario Franceschini welcomed his expected resignation.
"Today the curtain falls on a long and painful phase of Italian political history," he said."Today the curtain falls on a long and painful phase of Italian political history," he said.
"The country wants to turn the page and start again.""The country wants to turn the page and start again."
'Bye bye''Bye bye'
Meanwhile crowds gathered outside the parliament, shouting "Resign" and "Bye bye Silvio". Crowds gathered outside the parliament, shouting "Resign" and "Bye bye Silvio". Later, groups outside the president's and prime minister's offices shouted abuse, calling Mr Berlusconi a "buffoon" and a "clown".
The outgoing prime minister said he felt "embittered" after hearing the insults.
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, but there is significant opposition to him within the country.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, but there is significant opposition to him within the country.
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: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:
  • An increase in VAT, from 20% to 21%
  • A freeze on public-sector salaries until 2014
  • The retirement age for women in the private sector will gradually rise, from 60 in 2014 until it reaches 65 in 2026, the same age as for men
  • Measures to fight tax evasion will be strengthened, including a limit of 2,500 euros on cash transactions
  • There will be a special tax on the energy sector
  • An increase in VAT, from 20% to 21%
  • A freeze on public-sector salaries until 2014
  • The retirement age for women in the private sector will gradually rise, from 60 in 2014 until it reaches 65 in 2026, the same age as for men
  • Measures to fight tax evasion will be strengthened, including a limit of 2,500 euros on cash transactions
  • There will be a special tax on the energy sector
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% a year over the past 15 years.The Italian economy has grown at an average of 0.75% a year over the past 15 years.
Are you in Italy? What are your views on the austerity measures? Send us your comments using the form below.Are you in Italy? What are your views on the austerity measures? Send us your comments using the form below.