Now, Cheers as Berlusconi quits amid eurozone crisis
Berlusconi submitted his resignation to President Giorgio Napolitano> triggering an explosion of joy in the Italian capital with people uncorking bottles of champagne> dancing in the streets and honking car horns.
“I am deeply embittered>” the 75-year-old Berlusconi> who has been in power for 10 of the past 17 years> told reporters after he was greeted following his last cabinet meeting with shouts of “Buffoon!” and “Go Home!” “Ciao! And above all don’t come back!” shouted one man> while another declared: “We are very> very happy!” “We’re all delighted. We’ve had enough of this person who always acted in his own interests. Italy is headed for a better future>” said 50-year-old Tommaso Romito> muffled up in a white scarf on a cold night in Rome
Napolitano is to hold talks with all political forces from 0800 GMT to about 1700 GMT on Sunday> after which he is expected to nominate former EU commissioner Mario Monti as the head of a new transition government.
International Monetary Fund chief Christine Lagarde> US President Barack Obama and French President Nicolas Sarkozy have all called on Italy to move quickly to form an interim government instead of calling early elections.
Eurozone debt crisis: Italian prime minister Silvio Berlusconi will address the country's parliament on Wednesday about the soaring interest rate on its borrowing costs. Photograph: AGF/Rex Features
The eurozone debt crisis threatened to erupt again on Tuesday as Italy and Spain's borrowing costs hit record highs> helping to drive Britain's own borrowing costs down to a record low.
The euro also lost ground against most major currencies and the Italian stock market hit a 27-month low> as investors appeared to lose faith in the latest European rescue package.
The yield> or interest rate> on Italian 10-year bonds rose to nearly 6.3% at one stage> with the equivalent Spanish bonds yielding almost 6.5% early on Tuesday. If yields reach 7%> a country has effectively lost the support of the international markets.
In contrast> UK 10-year gilt yields hit an all-time low of 2.76%> amid suggestions that the UK has become a relative safe haven in response to the debt crises raging in both Europe and America
Jane Foley> senior currency strategist at Rabobank> said that Britain
"Slow economic growth> low interest rates> a highly indebted consumer sector and a large government fiscal deficit suggest there are clear similarities with the US
"The UK government> however> has proved itself to be better positioned to tackle its deficit demons and although there has been a lack of progress to date on achieving deficit reduction in the UK
Gold> that other refuge for risk-averse traders> hit another record high – reaching $1.639.66 an ounce.
Berlusconi’s announcement Tuesday that he would resign once parliament approved a package of economic reforms that he had promised the European Union> prompted fears of a prolonged political crisis in the eurozone’s third largest economy further dragging down the entire euro area. Investors are pushing for a new government to be in place by Monday> in time for the opening of the markets.
Speaking on the eve of an Asia-Pacific summit in Hawaii> Obama said: “There is still work to be done in the broader European community to provide markets a strong assurance that countries like Italy will be able to finance their debt.”
In a tumultuous parliamentary session that voted through economic reforms including state asset sell-offs and a liberalisation of the labour market> opposition lawmakers spoke of their relief at Berlusconi’s exit. AFP
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