The Italian senate has adopted a package of austerity measures designed to avoid a bailout of the eurozone's third largest economy. Italy raised 5 billion euros (£4.3 billion) from new government bonds Thursday. The Senate move aimed at staving off bankruptcy, includes state asset sell-offs and a liberalization of local services. Final approval of the measures by the lower house – expected today (Saturday) – is the precondition set by Prime Minister Silvio Berlusconi for his resignation after a parliamentary revolt deprived his coalition of a ruling majority. An EU team has begun work in Rome, monitoring how Italy plans to cut its crushing debt burden, 120 percent of annual economic output (GDP). The Italian economy has grown at an average of 0.75 percent a year over the past 15 years. Friday's vote was passed by 156 votes in favor, 12 against and one formal abstention, while opposition senators did not take part in the vote in order to show their objections but at the same time not hinder the approval. The measures also include a liberalization of professions like law and accountancy with the removal of minimum tariffs to increase competition as well as a reform to create “bureaucracy free zones” for companies to grow. With European leaders dithering over how to tackle the deepening crisis, pressure has mounted on the European Central Bank to act more forcefully by becoming a full lender of last resort, as the Federal Reserve and Bank of England are. Three senior ECB policymakers n Thursday rebuffed arm-twisting from investors and world leaders to intervene massively on bond markets to shield Italy and Spain from financial contagion. Germany Economy Minister Philipp Roesler said Friday the ECB did not have “unlimited firepower”, adding that if it opened its floodgates fully, they could never be closed again. Germany strongly opposes the ECB taking on a broader crisis-fighting role, arguing this would compromise the independence of the bank. The eurozone's plan for a more powerful rescue fund may also be running into trouble. Italy is under intense pressure to prove it has a strategy to deal with its debts, which stand at €1.9 trillion ($2.6 trillion), or a huge 120 percent of economic output. It has to rollover a little more than €300 billion of its debts next year alone. But economic growth is weak and the government failed to enact reforms to revive it over the past decade.
