ROME—The Italian Senate approved a package of growth-boosting measures on Friday that are likely to pave the way for the appointment of an interim government and the resignation of longtime Prime Minister Silvio Berlusconi.
The measures, which were contained in a hefty amendment to Italy's 2012 budget, passed the senate in a 156-12 vote. That outcome was widely expected amid pressure from Italy's head of state, President Giorgio Napolitano, and a slew of European Union authorities who have been pressing Italy to do something to reboot its stagnant economy.
The package, which includes measures to loosen local authorities' control over public-service contracts and liberalize professions, is part of Italy's effort to recalibrate its strategy for removing itself from the center of the euro zone's sovereign-debt crisis.Mr. Berlusconi, who tried to tackle the crisis with tax increases and spending cuts, has pledged to step down as soon as the measures are approved by the lower house, which will vote on the matter Saturday.
At that point, Italy's president Giorgio Napolitano will begin a round of consultations with the country's main political parties aimed at appointing a new government charged with administering painful medicine to Italy's ailing economy, and with restoring investor confidence in the euro zone's third-largest economy.
The amended budget, which was backed by Mr. Berlusconi's forces, also includes a plan to privatize public real estate in a way that could relieve pressure on the country's banks, which are large holders of Italian bonds.
The main opposition Democratic Party abstained from voting, a move of tacit support for a bill that was formally proposed by the government. Senators from Italy of Values, the second-largest party in the center-left coalition, voted against the bill.
Many lawmakers also expect the Chamber of Deputies, or lower house of Parliament, to swiftly pass the measures. The government has scheduled a final cabinet meeting Saturday evening once the parliamentary vote is completed. Mr. Berlusconi is then expected to hand in his resignation.
Mr. Napolitano, the president, is likely to name former European Union commissioner Mario Monti to head an interim government, though in Italy's volatile political landscape, last-minute changes remain a possibility.
Late Friday, some of Mr. Berlusconi's allies were pressing the premier to propose alternative candidates to helm an interim government, according to a person familiar with the matter, such as former prime minister Lamberto Dini and Angelino Alfano, a former justice minister who Mr. Berlusconi considers his political successor.
The person added, however, that Mr. Monti was still widely regarded as the front-runner and that dozens of lawmakers in Mr. Berlusconi's party were ready to back him.
If Mr. Monti is tapped, he will come under immediate pressure from investors and European regulators to take steps, such as a wealth tax, to lower Italy's €1.9 trillion ($2.6 trillion) debt. Italy has also faced repeated calls to free up its restrictive labor market and make further cuts to red tape.
It is unclear whether an interim government will have the latitude to introduce sweeping reforms in a country that for decades has resisted change. Much will depend on whether Mr. Napolitano manages to convince a broad swath of parliament to back a new government, giving a possible premier like Mr. Monti a commanding majority.
The Northern League, a former separatist party that has been Mr. Berlusconi's main coalition partner, has vowed to oppose an interim government, calling instead for early elections.
The League, however, does not control enough votes in Parliament to scuttle a new government. Mr. Berlusconi's People of Freedom Party is big enough to mount a serious challenge to a possible interim government.
So far, the party is divided over whether to support a new government or push for early elections. Transport Minister Altero Matteoli said the party will convene an emergency meeting of its governing committee on Saturday to decide on the matter. "I will support the final decision taken by the governing committee," Mr. Matteoli said.
wsj.com
The measures, which were contained in a hefty amendment to Italy's 2012 budget, passed the senate in a 156-12 vote. That outcome was widely expected amid pressure from Italy's head of state, President Giorgio Napolitano, and a slew of European Union authorities who have been pressing Italy to do something to reboot its stagnant economy.
The package, which includes measures to loosen local authorities' control over public-service contracts and liberalize professions, is part of Italy's effort to recalibrate its strategy for removing itself from the center of the euro zone's sovereign-debt crisis.Mr. Berlusconi, who tried to tackle the crisis with tax increases and spending cuts, has pledged to step down as soon as the measures are approved by the lower house, which will vote on the matter Saturday.
At that point, Italy's president Giorgio Napolitano will begin a round of consultations with the country's main political parties aimed at appointing a new government charged with administering painful medicine to Italy's ailing economy, and with restoring investor confidence in the euro zone's third-largest economy.
The amended budget, which was backed by Mr. Berlusconi's forces, also includes a plan to privatize public real estate in a way that could relieve pressure on the country's banks, which are large holders of Italian bonds.
The main opposition Democratic Party abstained from voting, a move of tacit support for a bill that was formally proposed by the government. Senators from Italy of Values, the second-largest party in the center-left coalition, voted against the bill.
Many lawmakers also expect the Chamber of Deputies, or lower house of Parliament, to swiftly pass the measures. The government has scheduled a final cabinet meeting Saturday evening once the parliamentary vote is completed. Mr. Berlusconi is then expected to hand in his resignation.
Mr. Napolitano, the president, is likely to name former European Union commissioner Mario Monti to head an interim government, though in Italy's volatile political landscape, last-minute changes remain a possibility.
Late Friday, some of Mr. Berlusconi's allies were pressing the premier to propose alternative candidates to helm an interim government, according to a person familiar with the matter, such as former prime minister Lamberto Dini and Angelino Alfano, a former justice minister who Mr. Berlusconi considers his political successor.
The person added, however, that Mr. Monti was still widely regarded as the front-runner and that dozens of lawmakers in Mr. Berlusconi's party were ready to back him.
If Mr. Monti is tapped, he will come under immediate pressure from investors and European regulators to take steps, such as a wealth tax, to lower Italy's €1.9 trillion ($2.6 trillion) debt. Italy has also faced repeated calls to free up its restrictive labor market and make further cuts to red tape.
It is unclear whether an interim government will have the latitude to introduce sweeping reforms in a country that for decades has resisted change. Much will depend on whether Mr. Napolitano manages to convince a broad swath of parliament to back a new government, giving a possible premier like Mr. Monti a commanding majority.
The Northern League, a former separatist party that has been Mr. Berlusconi's main coalition partner, has vowed to oppose an interim government, calling instead for early elections.
The League, however, does not control enough votes in Parliament to scuttle a new government. Mr. Berlusconi's People of Freedom Party is big enough to mount a serious challenge to a possible interim government.
So far, the party is divided over whether to support a new government or push for early elections. Transport Minister Altero Matteoli said the party will convene an emergency meeting of its governing committee on Saturday to decide on the matter. "I will support the final decision taken by the governing committee," Mr. Matteoli said.
wsj.com
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