Italy’s lower house of parliament is set to approve austerity legislation that will pave the way for the resignation of Prime Minister Silvio Berlusconi. CCTV correspondent Jack Barton reports Italian politicians are now working as fast as possible to forge a unity government that they hope could take shape as early as Monday.
In the Italian capital Rome it looks like any other day. But today the country’s long and often hotly debated economic reform legislation is expected to pass through the lower house of parliament. Now that the country has had a taste of panic in the bond markets, Italians believe their politicians have no choice but to push through reforms they had previously opposed.
Professor Irene Cartelli of American University of Rome said, “The national, the European and the international pressure coming also from the financial market crisis and so on will push Italy to do the reforms that political leaders are not willing to bear on their shoulders”.
Analysts also say a rapidly formed unity government is now far more likely that fresh elections.
Cartelli said, “Today we don’t have time it’s not a possibility because this could realistically bring Italy to a default”.
Italian Prime Minister Silvio Berlusconi has promised to step down once the reforms are passed. If he does relinquish power he is expected to be replaced by this man, Mario Monti, and experienced economist and former European Commissioner favored by the left and right to head a new government. But whoever takes the helm will have to introduce the new austerity measures that include selling 15 billion Euros of state assets, increasing the retirement age and liberalizing the country’s tough labor laws. The austerity vote follows the news that the overall EU economy continues to slow.
Olli Rehn, European Commissioner for Monetary Affairs, said, “We are forecasting 0.6 percent lower trade next year compared to our spring forecast. That may sound like a small figure but of course we are talking about very significant volumes”.
And EU official have already warned Italy that even bolder legislation will soon be needed if the country does not want to see the sun set on its economy and the markets take flight.
It seems certain that the austerity legislation will pass through Italy’s lower house of parliament but what comes next will determine when and how those economic reforms can be put into action.