On Friday, the Italian Senate passed a package relating to austerity measures in order to diminish fears of a potential debt crisis. The measures were approved by a vote of 156 to 12; however, this does not mean that the package will be put into effect yet because the Chamber of Deputies still has an opportunity to vote against it. Italy is the fourth-largest economy in Europe, but has one of the highest national debts in Europe as well. Many fear that Italy will suffer the same fate as Greece, in terms of finances, if they continue on the path they are on now and do not take the correct measures to remedy the potential debt crisis that is looming over their heads.
Italian President Giorgio Napolitano has said that “an interim government will be formed [after the reforms pass] or elections will be held.” The current Prime Minster, Silvio Berlusconi, is expected to step down if the measures are adopted, and Mario Monti is projected to take his place. Monti is a former EU commissioner, who held that position for ten years. This past week he met with President Napolitano and was appointed as a senator for life. Berlusconi seemed to show no ill will towards Monti based on the fact that he voiced his support of Monti on his Facebook page, where he congratulated Monti on his senator for life appointment.
What are Italy’s options for reforming their current financial structure? Do you think the reforms will prevent a potential financial collapse or is it too late for Italy? Do you think any of the remedial measures taken in America have been effective, and should be considered by Italy?