EuroZone Crisis Update: Italian PM Berlusconi Tenders Resignation

Silvio Berlusconi, stepped down as the Prime Minister of Italy on Saturday. As he left the presidential palace, crowds were there to jeer at him, calling him a “Buffoon”.

Berlusconi became unpopular due to a litany of scandals that have led to legal prosecution including tax evasion, corruption and sex with a minor.

As news of his resignation filtered down through media channels, thousands of people littered the streets of Rome celebrating, popping champagne and singing “Hallelujah”.

The embattled former leader heeded to calls asking him to tender his resignation in order for a new government to enter power and usher Italy out of its current economic crisis, which largely consists of a growing sovereign debt fiasco. Investors are driving the country’s borrowing costs up due to a lack of confidence in the government’s ability to honor its debt obligations i.e. coupon and principal repayments as and at when due.

Italy’s sovereign bond coupon rates soared to all time highs last week reaching 6.73% and forcing the European Central Bank to intervene and begin purchasing the paper in order to avert a financial meltdown.

Also yesterday, the lower house of the Italian Parliament passed a series of austerity measures demanded by the European Union.

The President of Italy,  Napolitano has begun consultations to select an interim government to usher Italy out of its current political and economic crises.

The man who is rumored to be top pick for the job is former European Commissioner, Mario Monti. Professor Mario Monti is an economist and head of Milan’s “ivy league” Bocconi University. He was made a senator-for-life last week as a preamble to his expected promotion.