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Italy's prime minister, Silvio Berlusconi, says he's going to resign. He promises to do so after an economic overhaul is approved in his country. This announcement comes amid European concerns over Italy's solvency, following the Greek debt crisis. The contagion is spreading. Yesterday Berlusconi lost the support of his political majority during a key budget vote in parliament.
And we're going to talk about all of this NPR's Sylvia Poggioli who is on the line from Rome.
SYLVIA POGGIOLI BYLINE: Hi, Steve.
INSKEEEP: Remind us of the events that got Berlusconi in trouble here.
BYLINE: Well, he's been under intense pressure for weeks now, from his - the opposition parties in Italy, from Italy's E.U. partners in Brussels, and also he's had a lot of rebels within his own party demanding that he step down. What happened is a routine bill was passed but there were more people abstaining then there were actually voting in favor. And that was just the visible proof that he had lost his majority in parliament.
INSKEEEP: And this has all happened at a moment when Italy, which is buying bonds, borrowing money, is having to pay higher and higher interest rates because of concern of about the possibility that Italy, like Greece, could get it in severe, severe trouble here.
BYLINE: Absolutely. And Berlusconi has lost the confidence of the markets and of his E.U. partners. They've made no secret that they want him to step down.
INSKEEEP: Okay, he said he won't step down immediately, but after these budget reforms are passed. When would that be?
BYLINE: Well, we don't know. That bill was originally supposed to be presented to the Senate next Tuesday and then it would also have to pass the lower House - that could take another week.
Berlusconi is clearly playing for time. He wants early elections. He doesn't want - so that he could stay as a caretaker, and that would allow him to influence political events. This clashes with the desires of the opposition parties, and of Italy's E.U. partners who want a national unity government. So, although he has said he is going to resign, Italy is still in for a period of uncertainty, in which he could try to regain control even though he has lost his majority in parliament.
INSKEEEP: I want to understand what it was that got Italy to this point, Sylvia Poggioli. Because, of course, it's got immense debt. But we also heard in recent weeks and months that their current budget situation is actually not that bad. Is Italy actually close to defaulting on debts?
BYLINE: Until July, nobody was bothering about Italy. And yes, theoretically they said it has a huge debt but its deficit is much smaller than many other European countries. The economy was still okay, it has been very stagnant in growth.
But clearly, with the Greek crisis escalating - Greece is a much smaller country, it can still be filled out. Italy is much bigger and the E.U. cannot bail it out. The IMF cannot bail it out. And the market started looking at Berlusconi. You know, you could almost use the old slogan: It's the Silvio, stupid. And he has been at the center of this crisis.
INSKEEEP: What are Italian saying?
BYLINE: Well, you know, the mood is very confused here. If you look at the traditional anti-Berlusconi media in sectors, there's of course a sense of glee. But the man has been described as the Houdini of Italian politics. He's survived many times in the past. And the real problem is that there's very little information or transparency. Everything is rumored, can't be confirmed.
The official government spokesman has not appeared in public for weeks, if not months. When Berlusconi wants to make his views known, he picks up the phone and calls into a live TV talk show. So there's still a lot of anxiety and uncertainty until he steps down.
INSKEEEP: So you're saying this is being driven by the markets. The markets hate uncertainty, of course. And what we have here is even more uncertainty for a moment.
BYLINE: That's right. I mean it's interesting that perhaps in the end, it's not going to be the sex scandals, or his trials for corruption or tax fraud. But what will probably in the end put him out of power will be the markets. And he would be, then, the most high-profiled victim of the eurozone crisis.
INSKEEEP: NPR's Sylvia Poggioli is in Rome. Sylvia, thanks very much.
BYLINE: Thank you, Steve. Transcript provided by NPR, Copyright NPR.