Italian senate has adopted a package of austerity measures designed to avoid a bailout of the euro zone third largest economy.
The austerity package is expected to get final approval in a vote by the parliament at the weekend, when is also expected Silvio Berlusconi’s resigns.
The austerity package foresees 59,800 million euro in savings from a mixture of spending cuts and tax rises. VAT increasing, freezing public-sector salaries, rising retirement age, new taxes and fight tax evasion are some of the measures planned to balance the budget by 2014.
This week Italian yield has increased to its maximum level since euro, passing the point at which Greece, Ireland and Portugal were rescued. Italian leaders are desperate to signal that they can bring the country’s finances under control, and they are moving fast.
A Team from the European Union has begun work in Italy, monitoring how the government’s plan to cut its crushing debt burden.
Some sources say that a technocrat government will follow Berlusconi’s administration. And also some analysts said that Mario Monti, former European Commissioner, could lead the new government.
By the moment, Giorgio Napolitano, president of Italy, has made Monti a senator for life. Analysts said Monti is exactly the sort of man that markets would like to see take charge at this time of crisis.