Nov 8 - Italian Prime Minister Silvio Berlusconi says he will step down after a humbling parliamentary defeat and as worried investors demand higher debt payments. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL A night time drive to the Presidential palace - a likely signal that Italian Prime Minister Silvio Berlusconi's days are numbered. A note read by an official from the President's office delivered what many Italians were waiting to hear - Berlusconi agreed to step down after a new austerity budget, currently under work, is passed by lawmakers. Berlusconi later confirmed the statement in a TV interview with Canale 5. Here is the audio only. SOUNDBITE: (AUDIO ONLY) ITALIAN PRIME MINISTER SILVIO BERLUSCONI (ITALIAN WITH ENGLISH TRANSLATION) SAYING: "I think it is a crucial to give the priority to the approval of these measures, so I went to see the president after today's vote and I explained him my idea, which is to ask the opposition to allow a fast-track approval of these stability measures, and after the approval of this finance law, which has amendments for everything which Europe has asked of us and which the Eurogroup has requested, I will resign, to allow the head of state to open consultations." His fate appeared to be sealed earlier in the day, when the long-standing politician's ruling party lost its majority in parliament. And markets let their voice be heard, pushing benchmark Italian bond yields closer to the danger zone of 7 percent. Even if Berlusconi follows through and steps down, that doesn't mean the crisis is over, warns S&P Capital IQ New York-based global equity strategist Alec Young. SOUNDBITE: ALEC YOUNG, GLOBAL EQUITY STRATEGIST, S&P CAPITAL IQ (ENGLISH) SAYING: "The European bailout fund, the European Financial Stability Fund, is widely seen as still being too small to accommodate a bailout of Italy and the way interest rates are moving I think investors are getting increasingly concerned that Italy is going to go the way of Greece and that there is not enough money there to contain the situation. And so, just because you're getting a change of leadership in Italy does not really resolve the situation by a long, long way." But replacing Berlusconi is seen as a step in the right direction. He's blamed for dragging his feet when it comes to dealing with his country's high debt, making Italy more vulnerable as a two-year debt crisis spreads across Europe. Conway Gittens, Reuters