Italy approves reforms; Berlusconi expected to resign

AMSTERDAM // Italy's prime minister, Silvio Berlusconi, was set to end his tumultuous reign last night after his country approved austerity measures in response to the euro zone debt crisis that is threatening to engulf it.

President Giorgio Napolitano was preparing to accept the media-mogul-turned-politician's resignation late yesterday after the lower house of parliament approved a package of savings and reforms to help reduce the deficit.

Mr Berlusconi's imminent departure signalled the end of an era for Italy and possibly for Europe, where the countless scandals that surrounded him and his weakening grasp on power had contributed to concerns over Italy's economic future and the stability of the euro single currency.

The new Italian emergency government is likely to be led by Mario Monti, an economist and former EU commissioner. But he is still facing some opposition within the party of the departing Mr Berlusconi.

Along with the swearing in of a transitional government in debt-wracked Greece on Thursday, the Italian moves were welcomed by international markets and officials.

The president of the International Monetary Fund, Christine Lagarde, said that the latest developments were a step in the right direction to restore trust in the euro zone.

"What we wanted at the IMF was political stability and a clear policy in both countries. I believe significant progress has been made," she said yesterday. The IMF is involved in bailing out Greece and boosting Europe's rescue fund, the European Financial Stability Facility.

The European Union, which is struggling to maintain political and economic credibility amid its flailing attempts to confront the financial crisis, also expressed relief at the changes in Italy, the euro zone's third largest economy.

Herman Van Rompuy, the EU president, called the Italian budget measures "a major step in the right direction, containing the measures to put Italy back on track and, when implemented, to start regaining the necessary credibility." But he might as well have been talking about the departure of Mr Berlusconi himself.

The controversial magnate nicknamed Il Cavalieri, literally "the knight", is the owner of Mediaset, the country's largest broadcaster. He never completely relinquished his interest in the company while he was in office. He ended up as Italy's longest-serving post-war prime minister but also its most-scandal hit.

During his three tenures, and in between as well, he faced allegations and prosecutions over such offences as conflicts of interest, tax evasion, corruption, bribery and abuse of office. This was only rivalled by an equally long litany of sexual scandal. But he was never convicted.

In one recent judicial case that is still ongoing - the juicily named Rubygate scandal - he is being investigated for having exerted his influence to release the 17-year-old Moroccan-born dancer and alleged prostitute, Karima El Mahroug, known as Ruby Rubacuori, after she had been arrested on charges of theft.

Mr Berlusconi is said to have known Miss El Mahroug from the infamous 'Bunga Bunga' parties at his house, where dozens of young women were invited to dance to African music and that she has likened to orgies. She has told prosecutors that she was given $10,000 (Dh36,700) by Mr Berlusconi.

While widely criticised and even ridiculed internationally over such shenanigans, Mr Berlusconi mostly retained strong support at home. And Russia's prime minister, and once and future president, Vladimir Putin praised him for having brought stability to Italy and called him, "one of the last Mohicans of European politics."

His likely replacement, Mr Monti, if confirmed, will be the second former EU competition commissioner in a matter of days to be named to run a debt-laden southern European euro zone country. Greece on Thursday appointed former commissioner Lucas Papademos to lead an interim government.

Mr Monti is part of the centre-left bloc in Italian politics and he has a reputation as a technocrat, rather than the flamboyant image associated with Mr Berlusconi.

But his appointment has not been secured yet, despite steps in that direction that were taken by president Giorgio Napolitano, who made Mr Monti senator for life last week. Mr Berlusconi's centre-right PDL, People of Freedom Party, will only decide on its stance once he has tendered his resignation.

The right-wing Northern League, whose decision to stop supporting Mr Berlusconi led to his fall, has said it is likely to oppose any broad-based government.

* With additional reporting by Reuters and Agence France-Presse