Berlusconi departure fails to calm the markets

Uncertainty over labour reform and spending cuts sees share prices dive and Italian bonds attacked

Milan

Europe looked on anxiously at the political maelstrom engulfing Italy yesterday, after Prime Minister Silvio Berlusconi's pledge to quit as soon as vital austerity measures are passed.

Click HERE to view graphic

Sliding share prices and continued attacks on Italian bonds reflected the huge political uncertainty as the outgoing leader's fragile centre-right coalition attempted to speed up the legislation's tortuous progress through parliament, as demanded by European leaders.

A somewhat vague commitment on Tuesday night by the centre-left opposition to back the package of labour reforms and spending cuts, and the inability thus far of the ruling centre-right government to stick to EU deadlines, left question marks over Italy's ability to act decisively against the debt crisis.

Predicting how or when the vital reforms would be implemented was made more difficult by the ongoing political scramble as all parliamentary groupings sought to be in poll position when, as seems probable, the President Giorgio Napolitano attempts to form a new government later this month. "This is exactly what's scaring the markets," Franco Pavoncello, a politics professor at Rome's John Cabot University, said. "We really don't know what's going to happen in the next few days or weeks."

One Berlusconi loyalist, the Defence Minister Ignazio La Russa, said the government could deliver the promised stability law within 10 to 15 days. But he added it might take up to 30 days.

By yesterday evening, however, positive signs were emerging that the gravity of Italy's – and Europe's – situation was finally dawning on political leaders. Italian newswires said the Senate President, Renato Schifani, would announce this morning a commitment to passing the stability law by tomorrow, in the form of an amendment to existing budget legislation. Anna Finocchiaro, the main opposition Democratic Party's leader in the Senate, pledged that her party would seek to ensure it was approved "as quickly as possible".

The bill would still face the tougher challenge of passing the lower house where the government no longer has a majority. But even here there were more hopeful signs as the Democratic Party's leader in the lower chamber, Dario Franceschini, said his MPs were willing to work through the weekend to speed the bill's passage. "I think the penny's dropped," Professor Pavoncello said. "If they don't act in a matter of days then the country goes bankrupt."

Meanwhile, speculation continued over the fate of Mr Berlusconi. Most experts considered it extremely improbable he could seek to go back on his commitment. And Mr Napolitano said yesterday that Mr Berlusconi would be gone and the stability legislation passed "in a matter of days" and then Mr Berlusconi would then quit.

In an interview on his own Canale 5 TV station, the 75-year-old tycoon again championed Justice Minister Angelino Alfano as the man most likely to succeed him as head of his People of Freedom (PDL) party after what would be a "consultation among the 1.2 million party members". Much speculation centres on the possibility of an established centre-right figure such as Mr Alfano or Gianni Letta, Mr Berlusconi's current cabinet under-secretary, forming a new government. Some observers believe instead that Mr Napolitano will create a technocrat government, possibly led by the former EU commissioner Mario Monti.

End of an era, but some things never change

You're 24 hours away from a vote that will ultimately bring the curtain down on your three-decade political career, and the country you lead is on the brink of financial Armageddon. So you go out and party. Silvio Berlusconi decided to spend Monday evening in the company of Francesca Pascale, a 25-year-old TV presenter with whom the 75-year-old media tycoon has been romantically linked. She was seen arriving at his residence in Rome at close to midnight, and, according to media reports, was seen leaving on Tuesday morning.

Alistair Dawber

News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Ben Affleck stars as prime suspect Nick Dunne in the film adaptation of Gone Girl
filmBen Affleck and Rosamund Pike excel in David Fincher's film, says Geoffrey Macnab
News
news
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Life and Style
fashionThe supermodel on her career, motherhood and Cara Delevingne
News
i100
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Arts and Entertainment
Rachel, Chandler and Ross try to get Ross's sofa up the stairs in the famous 'Pivot!' scene
tv
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Music Teacher

£85 - £125 per day: Randstad Education Chester: Job Opportunity for Secondary ...

Maths Teacher

£85 - £125 per day: Randstad Education Chester: Job Opportunity for Secondary ...

C# asp.net Developer - West Sussex - permanent - £40k - £50k

£40000 - £50000 Per Annum + excellent benefits package: Clearwater People Solu...

SQL Report Analyst (SSRS, CA, SQL 2012)

£30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments