This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/world-europe-15703459

The article has changed 13 times. There is an RSS feed of changes available.

Version 7 Version 8
Italy crisis: Lower house to vote on austerity law Italy crisis: Lower house approves austerity law
(about 2 hours later)
The lower house of Italy's parliament is due to vote on a package of austerity measures demanded by the EU and designed to restore markets' confidence in the country's economy. 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.
The vote will pave the way for Silvio Berlusconi to resign as prime minister. The vote paves the way for Silvio Berlusconi to resign as prime minister.
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 Senate on Friday backed the plan, which includes a rise in VAT and the pension age, a fuel price hike and also the sale of state assets. The Senate had already backed the package, which includes a rise in VAT and the pension age, a fuel price hike and also the sale of state assets.
Following that vote, shares in most European markets rose 2-3%, and the interest rate paid on Italy's 10-year bonds dropped. 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.
International Monetary Fund chief Christine Lagarde has welcomed the "significant progress" made in tackling the political crisis in Italy and Greece, where interim Prime Minister Lucas Papademos was sworn in at the head of a new cabinet on Friday. Members of the lower house voted 380-26 with two abstentions, after the Senate approved the measures easily on Friday.
"What we wanted at the IMF was political stability and a clear policy in both countries. I believe significant progress has been made," she said on Saturday during a visit to Tokyo. Mr Berlusconi is now expected to tender his resignation to President Giorgio Napolitano, after a final cabinet meeting.
Moving fast Mr Napolitano could then formally ask Mr Monti or another candidate to form a government of technocrats.
Mr Berlusconi, who survived a lost his parliamentary majority in a vote on Tuesday, has promised to resign after the austerity measures are passed by both houses of parliament. "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.
On Thursday, President Giorgio Napolitano - whose role is largely ceremonial - said he wished to "dispel any doubt or misunderstanding" on when the prime minister would fulfil his promise to resign. Opposition MP Dario Franceschini welcomed his expected resignation.
The lower house, the chamber of deputies, is currently debating the austerity package and is expected to complete its vote later in the day, allowing Mr Napolitano to accept Mr Berlusconi's resignation as early as Saturday evening. "Today the curtain falls on a long and painful phase of Italian political history," he said.
He could then formally ask Mr Monti or another candidate to form a government of technocrats. "The country wants to turn the page and start again."
'Bye bye'
Meanwhile crowds gathered outside the parliament, shouting "Resign" and "Bye bye Silvio".
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, 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.