Italy's Senate passes austerity plans

@CNNMoney November 11, 2011: 8:29 AM ET
Nitto Palma and Giulio Tremonti  talk as Mario Monti, the frontrunner to replace Silvio Berlusconi as Italian prime minister arrives at the Senate in Rome on November 11.

Italy's Justice minister Nitto Palma and Finance minister Giulio Tremonti talk as former European commissioner Mario Monti, the frontrunner to replace Silvio Berlusconi as Italian prime minister arrives at the Senate in Rome on November 11.

ROME (CNN) -- The Italian Senate passed a series of austerity measures Friday demanded by Europe, as it seeks to ward off fears of a debt-driven crisis.

The package was approved by 156 votes in favor to 12 against, with one abstention. It only had to be passed by those of the 320 senators who were present for the vote.

The lower house, the Chamber of Deputies, is expected to discuss the measures and vote Saturday.

Prime Minister Silvio Berlusconi is expected to step down after the austerity measures are adopted by both houses.

Intended to cut spending and boost growth, they include pension reform, with plans to raise the retirement age from 65 to 67, the privatization of state-owned companies and sale of state-owned properties, the liberalization of certain professions and investment in infrastructure.

Berlusconi assured European leaders the measures would be implemented in a letter to the European Union late last month amid concerns that the reforms might stall.

As the eighth-largest economy in the world and the fourth-largest in Europe, Italy is seen as vulnerable to the debt crisis that has brought down Greece, although economists say Italy remains solvent. (See the world's largest economies)

Italian President Giorgio Napolitano has said that after the Italian parliament passes the reforms, either an interim government will be formed or elections will be held.

Italy gave indications Thursday that there may be growing support for former EU commissioner Mario Monti to take the helm in place of Berlusconi.

Monti spent two hours meeting with the president Thursday evening shortly after being made a senator for life, Italy's ANSA news agency reported.

The appointment means Monti was able to vote Friday in the Senate.

Berlusconi appeared to signal his support Thursday for Monti, who has a reputation as a hard-working, intellectually rigorous technocrat.

In a post on Berlusconi's official Facebook page, he wrote that he had sent a telegram to Monti congratulating him on being appointed by the president to be a "senator for life, reflecting the outstanding achievements" in certain arenas. "I wish him a successful job in the national interest," Berlusconi said.

Europe's reluctant savior

Foreign Minister Franco Frattini also said he supports an emergency government of national unity led by Monti.

"He has an international profile that no one can deny," Frattini said, according to his press office.

Monti was a member of the European Commission for 10 years. For half that time he was the competition commissioner, leading high-profile anti-trust cases involving large companies including Microsoft.

Investor confidence plummeted Wednesday when the yield on 10-year Italian government bonds rose above 7%, the level at which other European countries -- including Greece, Portugal and Ireland -- have sought international bailouts.

Tensions eased slightly Thursday as Italian 10-year bonds traded lower, following intervention by the European Central Bank.

Italy has one of the highest national debts in Europe, about 120% of GDP or about €1.9 trillion and has seen low growth in recent years. To top of page

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