November 8, 2011
Italian Prime Minister Silvio Berlusconi, the seemingly untouchable media magnate who has brushed off countless scandals and challenges to his rule, said he would resign Tuesday after losing a governing majority in Parliament. Earlier Tuesday he passed a crucial budget vote, but failed to muster a majority on the measure. Meanwhile the $2.6 trillion Italian bond market moved toward unsustainable levels, with yields on benchmark 10-years surging past 6.7%.
“If I must die, I’ll do it in the House,” said a defiant Berlusconi on Tuesday, vowing to meet his “traitors” in Parliament. Hours later, he passed a key budget measure with 308 votes, seven short of a majority, as 321 lawmakers abstained. Berlusconi’s failure to marshal a 316-vote working majority on the budget measure suggested he would fail to pass a confidence vote, leading to calls for his resignation. Italian bond yields surged, and U.S. equity markets plunged deeper into negative territory.