Italy's lower house of Parliament passed a debt-cutting budget bill Saturday, and Prime Minister Silvio Berlusconi is set to resign soon, according to media reports. An improved political picture in Italy together with a new prime minister in Greece, is helping to patch up fragile investor sentiment, but some analysts say it could be short-lived. Aiming to reduce the country's debt of about $2.6 trillion, the Chamber of Deputies approved an economic package that calls for raising the retirement age in coming years and selling real estate, among others actions. The vote in the lower chamber was 380-26. The Italian Senate had already approved the measure in a 156-12 vote, a move that saw European and US equities rally, while the euro turned higher. Mario Monti, an economist and former European Union commissioner, is a top contender to lead the country, according to reports. Analysts say momentum remains behind calls for Monti, 68, to head a technocratic government that will aim to implement austerity measures and other reforms to open up the nation's labor market, among other aspects of the economy. Unaligned with any of Italy's major political parties, Monti served two terms in the European Commission. From 1999 to 2004, Monti was the commissioner for competition policy, where he led Europe's antitrust case against Microsoft Corp. In his previous term, he served as commissioner for the internal market, services, customs and taxation. Speaking to reporters earlier this week, Christine Lagarde, managing director of the International Monetary Fund, said “political clarity” is “much needed” in Italy and Greece.
