ROME — The European debt crisis appeared to claim its most prominent victim on Tuesday when Prime Minister Silvio Berlusconi of Italy, cornered by world markets and humiliated by a parliamentary setback, pledged to resign after Italy’s Parliament passes austerity measures demanded by the European Union.
In the end, it was not the sex scandals, the corruption trials against him or even a loss of popular consensus that appeared to end Mr. Berlusconi’s 17 years as a dominant figure in Italian political life. It was, instead, the pressure of the markets — which drove Italy’s borrowing costs to record highs — and the European Union, which could not risk his dragging down the euro and with it the world economy.
On Wednesday, yields on 10-year Italian government bonds — the price demanded by investors to loan Italy money — edged above 7 percent, the highest level since the adoption of the euro 10 years ago and close to levels that have required other euro zone countries to seek bailouts.
After Mr. Berlusconi’s pledge to resign, stocks rallied in New York on hopes that political change would help pave the way for an easing of the European debt crisis. But Europe’s markets fell Wednesday for the third straight day in early trading.
Although Mr. Berlusconi’s exit was not immediate — weeks of political wrangling over the austerity measures probably lie ahead — political commentators said they could see no escape this time for the prime minister, whose Houdini-like ability to wriggle free from scandals is legendary.
“A season is over,” said Mario Calabresi, the editor in chief of the Turin daily newspaper La Stampa, who said Mr. Berlusconi told him that he was not only stepping down, but also would not run for office again.
With fears that the debt crisis would spread from Greece to Italy, whose economy is too big to bail out, pressure had been building on Mr. Berlusconi to resign for weeks, including recently from members of his center-right coalition. Even the Roman Catholic Church, whose support is crucial for any Italian government, began harshly criticizing him.
European leaders, who have long questioned Mr. Berlusconi’s commitment to fundamental economic changes, had become especially concerned that he no longer had enough control of his coalition to deliver on promises of crucial reforms and that in a crisis built partly on perception, Italy’s reputation was too closely linked to his own.
In a sign of the seriousness of the fears, a delegation from the European Commission was due in Rome on Wednesday to check on the country’s reform program, days after the International Monetary Fund said it would monitor Italy’s progress, a rare intrusion for an economy the size of Italy’s.
Mr. Berlusconi’s announcement came just days after Greece’s leader, Prime Minister George A. Papandreou, also overcome by financial troubles, agreed to resign in favor of a unity government.
The immediate trigger for Mr. Berlusconi’s decision was a procedural vote in Parliament that made it clear that he had lost his majority after defections from his coalition. Umberto Bossi, a crucial ally and the leader of the Northern League, a coalition member, said he had told the prime minister to step aside for the good of the country.
After the parliamentary vote, a photographer’s zoom lens caught Mr. Berlusconi writing “8 traitors” on a piece of paper on which he had also written “resignation.”
Hours later, he met with the president of Italy, Giorgio Napolitano, and said he would resign.
A statement issued by the president’s office after the meeting said that the prime minister had acknowledged “the implications of the result of the day’s vote in the lower house,” but at the same time had expressed “concerns” about the need to pass the urgent reforms requested by Italy’s “European partners.”
In a telephone call to the state broadcaster RAI, Mr. Berlusconi said, “Today’s vote reinforced my concerns about the moment that we are experiencing, a situation where the markets do not believe that we really want to introduce the liberalizing measures that Europe insistently asked us to carry out.”
nytimes.com
In the end, it was not the sex scandals, the corruption trials against him or even a loss of popular consensus that appeared to end Mr. Berlusconi’s 17 years as a dominant figure in Italian political life. It was, instead, the pressure of the markets — which drove Italy’s borrowing costs to record highs — and the European Union, which could not risk his dragging down the euro and with it the world economy.
On Wednesday, yields on 10-year Italian government bonds — the price demanded by investors to loan Italy money — edged above 7 percent, the highest level since the adoption of the euro 10 years ago and close to levels that have required other euro zone countries to seek bailouts.
After Mr. Berlusconi’s pledge to resign, stocks rallied in New York on hopes that political change would help pave the way for an easing of the European debt crisis. But Europe’s markets fell Wednesday for the third straight day in early trading.
Although Mr. Berlusconi’s exit was not immediate — weeks of political wrangling over the austerity measures probably lie ahead — political commentators said they could see no escape this time for the prime minister, whose Houdini-like ability to wriggle free from scandals is legendary.
“A season is over,” said Mario Calabresi, the editor in chief of the Turin daily newspaper La Stampa, who said Mr. Berlusconi told him that he was not only stepping down, but also would not run for office again.
With fears that the debt crisis would spread from Greece to Italy, whose economy is too big to bail out, pressure had been building on Mr. Berlusconi to resign for weeks, including recently from members of his center-right coalition. Even the Roman Catholic Church, whose support is crucial for any Italian government, began harshly criticizing him.
European leaders, who have long questioned Mr. Berlusconi’s commitment to fundamental economic changes, had become especially concerned that he no longer had enough control of his coalition to deliver on promises of crucial reforms and that in a crisis built partly on perception, Italy’s reputation was too closely linked to his own.
In a sign of the seriousness of the fears, a delegation from the European Commission was due in Rome on Wednesday to check on the country’s reform program, days after the International Monetary Fund said it would monitor Italy’s progress, a rare intrusion for an economy the size of Italy’s.
Mr. Berlusconi’s announcement came just days after Greece’s leader, Prime Minister George A. Papandreou, also overcome by financial troubles, agreed to resign in favor of a unity government.
The immediate trigger for Mr. Berlusconi’s decision was a procedural vote in Parliament that made it clear that he had lost his majority after defections from his coalition. Umberto Bossi, a crucial ally and the leader of the Northern League, a coalition member, said he had told the prime minister to step aside for the good of the country.
After the parliamentary vote, a photographer’s zoom lens caught Mr. Berlusconi writing “8 traitors” on a piece of paper on which he had also written “resignation.”
Hours later, he met with the president of Italy, Giorgio Napolitano, and said he would resign.
A statement issued by the president’s office after the meeting said that the prime minister had acknowledged “the implications of the result of the day’s vote in the lower house,” but at the same time had expressed “concerns” about the need to pass the urgent reforms requested by Italy’s “European partners.”
In a telephone call to the state broadcaster RAI, Mr. Berlusconi said, “Today’s vote reinforced my concerns about the moment that we are experiencing, a situation where the markets do not believe that we really want to introduce the liberalizing measures that Europe insistently asked us to carry out.”
nytimes.com
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