Overcast74° WeatherOvercast74° Weather

Italy, Greece move quickly to end crisis

Sen. Maurizio Gasparri of the People of Freedom Party speaks to other lawmakers Friday during a voting session on economic reforms in the Senate in Rome. The Senate approved austerity measures, a first step toward easing Prime Minister Silvio Berlusconi from office. 

Associated Press

Sen. Maurizio Gasparri of the People of Freedom Party speaks to other lawmakers Friday during a voting session on economic reforms in the Senate in Rome. The Senate approved austerity measures, a first step toward easing Prime Minister Silvio Berlusconi from office. 

ROME — With Europe under mounting pressure to act quickly to tackle its debt crisis, the leaders of Italy and Greece moved forcefully Friday to reinvigorate their governments and show their sincerity about economic austerity. Financial markets rallied on the news.

The Italian Senate approved austerity measures, a first step toward easing Prime Minister Silvio Berlusconi from office, while in Athens, Greek leaders of a new three-party coalition completed details of a national unity government.

To speed the process in the Italian Senate, opposition lawmakers refrained from voting, allowing the legislation to pass by a vote of 156-12.

The uncommon burst of activity will enable Italy's lower house to complete parliamentary approval of the package today. Berlusconi promised this week to resign once the measures were approved, permitting a new leader to be appointed as the head of a technocratic government. He is expected to step down either today or Sunday.

Mario Monti, a former European commissioner, has been widely mentioned as a likely front-runner, and he could take over as early as Monday.

In Greece, after similar maneuvers to replace elected leaders with respected, veteran officials known for their expertise rather than their political skills, Lucas Papademos, the prime minister chosen by the three-party coalition, unveiled his Cabinet choices, who were sworn in by midafternoon. Finance Minister Evangelos Venizelos will remain in his post, as will other important ministers of the outgoing government of George A. Papandreou, the former prime minister. Papademos also brought in several members of opposition parties.

Days of political turmoil roiled bond markets this week, pushing the cost of borrowing in Italy to levels that economists regard as unsustainable and adding to the pressures on politicians. The yield on Italy's 10-year bond, a barometer of investor anxiety, eased back to about 6.6 percent Friday after having exceeded 7 percent at the height of the crisis.

By other measures, the promised changes in Greece and Italy heartened investors as well, at least for the moment: The leading stock market indexes in Britain, France and Germany all gained on Friday, and the rally extended to Wall Street.

Italy, Greece move quickly to end crisis 11/11/11 [Last modified: Friday, November 11, 2011 11:09pm]

    

Join the discussion: Click to view comments, add yours

Loading...