Newly appointed prime minister Lucas Papademos leaves the Greek Presidential palace in Athens on November 10, 2011. Photo by Louisa Gouliamaki/AFP/Getty Images.
Italy’s senate passed a bill to usher in a series of austerity measures in an attempt to avoid a bailout, sending the measure to the lower house of parliament, where it is expected to pass and then be signed into law by outgoing Prime Minister Silvio Berlusconi. The bill was designed to save 59.8 billion euros through a combination of spending cuts and tax increases, with the goal of balancing the country’s budget by 2014.
Former European Union commissioner Mario Monti is being considered to form a transitional government that would implement austerity measures. The Associated Press reports that, “[t]he prospect of a government headed by the non-partisan Monti calmed markets for a second day, with Italy’s 10-year borrowing rate down a further 0.21 of a percentage point to 6.59 percent. The Milan stock index was up 1.7 percent.”
In Greece, economist and former European Central Bank vice president Lucas Papademos was sworn in on Friday, replacing George Papandreou, who resigned after taking flak for announcing a public referendum on a planned bailout package designed to help Greece avoid default. Papademos has vowed to carry out the bailout package — and accompanying austerity measures — and announced a new cabinet Friday with finance minister Evangelos Venizelos staying on board.
After weeks of pressure on Berlusconi and Papandreou, the focus is shifting to incoming leaders and whether reforms can ease Europe’s debt crisis. According to the The New York Times,
“The question now, in both Italy and Greece, is whether the technocrats can succeed where elected leaders failed — whether pressure from the European Union backed by the whip of the financial markets will be enough to dislodge the entrenched cultures of political patronage that experts largely blame for the slow growth and financial crises that plague both countries.”
The NewsHour’s been digging in to the issues lurking for Italy and Greece in recent weeks and months – here are three stories to watch:
Italy’s Debt Dilemma: Too Big to Fail, Too Big to Rescue?
With Debt Fix in Danger, Is It Europe’s ‘Lehman’s Moment’?
And for some deeper background, watch this Paul Solman piece on the Greek economy from 2010: