Italy's Senate approves austerity plans

The Italian Senate is expected to vote on an austerity package as it seeks to ward off fears of a debt-driven crisis.

Story highlights

  • Italy's Senate approves the economic reforms by 156 votes in favor, 12 against
  • The lower house is expected to discuss the measures and vote on them Saturday
  • Once the measures are adopted, Berlusconi is expected to step down
  • Mario Monti is touted as a possible successor
The Italian Senate passed a series of austerity measures Friday demanded by Europe, as it seeks to ward off fears of a debt-driven crisis.
The package was approved by 156 votes in favor to 12 against, with one abstention. It only had to be passed by those of the 320 senators who were present for the vote.
The lower house, the Chamber of Deputies, is expected to discuss the measures and vote Saturday.
Prime Minister Silvio Berlusconi is expected to step down after the austerity measures are adopted by both houses.
Intended to cut spending and boost growth, they include pension reform, with plans to raise the retirement age from 65 to 67, the privatization of state-owned companies and sale of state-owned properties, the liberalization of certain professions and investment in infrastructure.
Berlusconi assured European leaders the measures would be implemented in a letter to the European Union late last month amid concerns that the reforms might stall.
Italy running out of options
Italy running out of options

    JUST WATCHED

    Italy running out of options

MUST WATCH

Italy running out of options 01:56
Italy struggles with uncertainty
Italy struggles with uncertainty

    JUST WATCHED

    Italy struggles with uncertainty

MUST WATCH

Italy struggles with uncertainty 01:27
Bond markets react to Italy news
Bond markets react to Italy news

    JUST WATCHED

    Bond markets react to Italy news

MUST WATCH

Bond markets react to Italy news 02:28
Bond yields and Berlusconi
Bond yields and Berlusconi

    JUST WATCHED

    Bond yields and Berlusconi

MUST WATCH

Bond yields and Berlusconi 04:04
As the eighth-largest economy in the world and the fourth-largest in Europe, Italy is seen as vulnerable to the debt crisis that has brought down Greece, although economists say Italy remains solvent.
Italian President Giorgio Napolitano has said that after the Italian parliament passes the reforms, either an interim government will be formed or elections will be held.
Italy gave indications Thursday that there may be growing support for former EU commissioner Mario Monti to take the helm in place of Berlusconi.
Monti spent two hours meeting with the president Thursday evening shortly after being made a senator for life, Italy's ANSA news agency reported.
The appointment means Monti was able to vote Friday in the Senate.
Berlusconi appeared to signal his support Thursday for Monti, who has a reputation as a hard-working, intellectually rigorous technocrat.
In a post on Berlusconi's official Facebook page, he wrote that he had sent a telegram to Monti congratulating him on being appointed by the president to be a "senator for life, reflecting the outstanding achievements" in certain arenas. "I wish him a successful job in the national interest," Berlusconi said.
Foreign Minister Franco Frattini also said he supports an emergency government of national unity led by Monti.
"He has an international profile that no one can deny," Frattini said, according to his press office.
Monti was a member of the European Commission for 10 years. For half that time he was the competition commissioner, leading high-profile anti-trust cases involving large companies including Microsoft.
Investor confidence plummeted Wednesday when the yield on 10-year Italian government bonds rose above 7%, the level at which other European countries -- including Greece, Portugal and Ireland -- have sought international bailouts.
Tensions eased slightly Thursday as Italian 10-year bonds traded lower, following intervention by the European Central Bank.
Italy has one of the highest national debts in Europe, about 120% of GDP or about €1.9 trillion and has seen low growth in recent years.