European crisis costs Italian premier Berlusconi support

Italian premier Silvio Berlusconi conceded yesterday that he no longer enjoyed the support to govern and announced he would resign like his Greek counterpart. In the process he has become the biggest political casualty of the European debt crisis so far.

The Italian premier promised to step down after parliament passed economic reforms demanded by the EU to keep Italy from falling into the debt mess that Europe finds itself in. He made the decision hours following a vote on a routine piece of legislation that made it clear he no longer commanded a majority in the lower Chamber of Deputies.

A vote on the reform measure has been planned for next week which would give Berlusconi a few more days before his turbulent 17 years in public life as also a political era in Italy draws to a close. Over the years, the political establishment in Italy watched as the media mogul deftly put behind him sex scandals and corruption charges while branding his opponents communists, traitors and terrorists.

Both Italy and Greece are under heavy pressure from financial markets over the 17-country eurozone's ability to survive crippling government debts. The eurozone's unity is under severe stress and a break up could trigger a new global recession say analysts.

Meanwhile, in Greece prime minister George Papandreou and opposition leader Antonis Samaras were yesterday engaged in a critical power-sharing talks that proved inconclusive.

The two have agreed the new government would steer the country's new €130-billion European rescue package through parliament and end a political crisis that has cast a shadow over Greece's solvency and membership of the eurozone.