Italy’s Senate Speeds Austerity Vote

Discussion in 'Wall St. News' started by ASusilovic, Nov 10, 2011.

  1. Italy’s Senate rushed to pass debt- reduction measures that clear the way for establishing a new government in a bid to restore confidence in Europe’s second- biggest debtor.

    The Senate is set to vote tomorrow on a package of measures including asset sales and an increase in the retirement age. The Chamber of Deputies should vote the following day, and Prime MinisterSilvio Berlusconi will resign “immediately,” Angelino Alfano, the secretary of Berlusconi’s People of Liberty party said on state-owned Rai television last night.

    Italy’s bond yields yesterday surged past the 7 percent threshold that prompted Greece, Portugal and Ireland to seek bailouts after Berlusconi’s parliamentary majority unraveled and LCH Clearnet SA said it would demand additional collateral on Italian debt. German Finance Minister Wolfgang Schaeuble told lawmakers yesterday Italy may need to consider a request for European Union aid, two people present at the meeting said.

    “A prolonged period of 10-year bond yields in excess of 7 percent alongside a faltering economy is a dangerous mix, and could send Italy’s debt dynamics lurching towards an unsustainable and ultimately insolvent position,” Raj Badiani, senior economist at HIS Global Insight wrote in a note to investors. “However, we continue to argue that Italy remains solvent, and that it can survive several quarters of expensive debt auctions.”