Parliamentary sources in Italy say that Italy’s Prime Minister Silvio Berlusconi will tender his resignation today (Sat) at 19:30 GMT.
The Italian Senate passed new austerity measures on Friday. Another vote is required for final approval which is due soon.
Update: The lower house of the Italian parliament approved the measures. The door out is open for Berlusconi.
Berlusconi is set to officially hand in his resignation to the Italian president Giorgio Napolitano.
The leading candidate to replace him is Mario Monti. Italy is set to follow Greece and hand in power to a technocrat government. Will this satisfy markets?
Italian bond yields climbed well above the dangerous “bailout barrier” of 7% on Wednesday, but were pushed lower after Italy moved forward to approve the measures, and especially after the ECB increased its bond buying program.
Seeing Berlusconi really out will likely be accepted in a positive manner, but probably only for a short time. The lack of trust and the low growth are problems that cannot be solved instantly, especially as Europe is entering a recession.
For everything awaiting the euro, see the EUR/USD forecast.