The past week, the financial world has been particularly concerned about the financial crisis Italy has been facing. The debt crisis has pushed interest rates to a record 7% earlier this week. Fortunately, interest rates declined to 6% yesterday and Italy successfully sold off its bonds at a recent auction.
The financial community was even more grateful today, when the Italian Senate announced that it passed the financial stability bill. Most financial professionals believe that this is the first step that is necessary for the country to resolve the debt crisis. Although Italy still has a number of issues to resolve before debt crisis is resolved, most professionals feel this package is a good start. Of course, there are also plenty of skeptics as well.
Regardless of whether the bill will help or hurt the crisis in Italy, it is going to have a profound effect on the future of Italy and the rest of the European Union. First of all, it will mark the resignation of Prime Minister Silvio Berlusconi. Berlusconi has agreed to stay in power until the bill is passed.
Those questions will soon be answered. The House will hold the final vote on the bill on Saturday. After the weekend, Berlusconi may officially step down as prime minister and his successor may be ready to step in. Some speculate that his successor will be a former member of the central bank.
The financial markets are still waiting to see how smoothly the new bill is implemented and the new prime minister is sworn in. Many people expect that Mario Monti will be responsible for making sure the transition is setup smoothly.
Although the entire world continues to wait for the debt crisis in Italy and other EU nations to be resolved, there is still a lot of uncertainty in the financial markets. No one can be sure that the financial community will be satisfied with the new restructuring of the country. However, the Senate has at least implemented a plan to address one of the largest debt problems the eurozone has ever witnessed.