Italy’s Silvio Berlusconi is planning to stand down after losing his parliamentary majority amid the financial turmoil engulfing Italy. Channel 4 News looks at the country’s economic future.
Europe’s longest-serving leader told President Giorgio Napolitano that he will resign after the new budget law currently making its way through parliament is approved. This is expected to be passed by the end of this month, but its passage might now be accelerated.
President Napolitano said Mr Berlusconi was aware of the consequences of a vote today in which his centre-right coalition failed to secure a majority in the lower house.
The government won the vote on ratifying the 2010 accounts, but lost the support up to eight deputies from his own People of Liberty party. This left him short of an absolute majority.
Does Italy need to be saved?
Ahead of Silvio Berlusconi's resignation announcement, the head of economic research at the Open Europe think tank, Raoul Ruparel, told Channel 4 News that people had completely lost patience with Berlusconi.
"He has no credibility in enacting reforms. He's the figurehead of all that is wrong with the political and economic approach over the past few years in Italy," he said.
You can read more on whether Italy needs to be saved by the eurozone here.
President Napolitano said the prime minister recognised how important it was that the budget law was adopted, adding: “Once this engagement is fulfilled, the prime minister will hand in his mandate to the head of state who will proceed with appropriate consultations, paying close attention to the positions and proposals of all political forces.”
Italy, the eurozone’s third biggest economy, is in the midst of a crisis, with debts of 1.9 tr euros. The interest rates it is paying to borrow on the markets are edging towards the 7 per cent level that triggered bailouts for Portugal and Ireland. There are fears the future of the euro could be at stake if Italy’s problems are not resolved.
So far, the emphasis during the European debt crisis has been on Greece, where a coalition government is being formed after George Papandreou agreed to stand down as prime minister.
But with the yield on Italian bonds increasing to a 12-year high due to market fears about the country’s debts and political instability, attention has shifted from Athens to Rome.
Mr Berlusconi has been criticised for not doing more to defuse Italy’s debt crisis. At the G20 summit in Cannes last week, he was forced to accept regular monitoring from the IMF on his progress in implementing reforms.
As Italy’s longest-serving post-war prime minister, he has survived more than 50 confidence votes and has rarely been out of the public eye. A media mogul, he is one of the wealthiest men in Italy and has been accused of tax fraud and embezzlement, but has always denied this.
He is currently on trial charged with paying for sex with an under-age prostitute, Karima ‘Ruby’ El Mahroug. They both deny the charge.