Italian prime minister resigns; crowds celebrate

ROME —  Europe’s economic “Arab Spring” toppled another leader Saturday night as Italian Prime Minister Silvio Berlusconi, beaten down by days of political turmoil and intense pressure from financial markets, resigned to catcalls and shouts of “Fool! Fool!”

It was an ignominious departure for the most flamboyant leader of the debt-staggered European Union, a billionaire whose sex scandals and embarrassing gaffes had left his people fuming over being the continent’s laughingstock.

Berlusconi’s resignation came in the same week that Greece’s prime minister, George Papandreou, relinquished his post to make way for a new coalition government headed by a technocratic economist. A similar path awaits Italy.

And at the end of this week, Spain’s ruling Socialist Party is likely to be routed in an election, which would bring to six the number of governments or leaders in Europe brought down in the last 12 months by a debt crisis that has left some wondering whether the Eurozone can survive.

The economic domino effect may prove as profoundly transformational in Europe as the Middle East uprisings that have seen three entrenched leaders ousted and others facing once-unthinkable revolts.

In Italy on Saturday night, many people were celebrating what they saw as an end of an ignoble era in which the country has been taken to the brink of financial ruin.

But only a week ago, few could have imagined such a quick departure for the 75-year-old Berlusconi, who over the last 17 years of dominating Italian politics had survived multiple allegations of corruption and sexual impropriety.

Yet not even the wily politician, a media tycoon nicknamed “the Knight,” could withstand an onslaught from financial markets that saw Berlusconi as a symbol of Italy’s severe debt troubles.

Berlusconi tried in a last-ditch maneuver Tuesday to salvage his political career, pledging to resign, but only after the deeply splintered Parliament passed a package of austerity measures sought by the European Union. The conditional promise was seen as a way to buy time, but when bond investors kept applying pressure on Italy by ratcheting up its borrowing costs, Italian lawmakers, including some of Berlusconi’s onetime supporters, moved quickly to ensure his departure before Monday’s financial markets opened.

Early Saturday evening, the lower house of Parliament overwhelmingly passed the austerity bill, a day after the upper chamber, the Senate, took similar action. The law directs the government to sell state-owned assets, cut red tape, liberalize labor laws and take other measures to reduce Italy’s $2.6-trillion debt and spur its stagnant economic growth.

“I’m very worried for Italy,” Livia Turco, a longtime lawmaker, said as she emerged onto the cobbled Parliament square after the vote Saturday evening. “But I’m very happy it’s the end of the Berlusconi era in the Parliament.” Her voice was tinged with anger as she considered his legacy. “He leaves an Italy that is more poor, lost authority and was made a joke by everyone.”

Turco looked out at the throng of people who jammed the street in front of the square. At times, the crowd burst into chants, and then into howls, as some of Berlusconi’s center-right party members came out after voting. TV camera crews jostled, racing to interview one member, then another, on the constant prowl in case Berlusconi made a quiet escape from the back.

Ferdinando Dolce, 37, was among the crowd watching the scene with his girlfriend as day turned to night. “This is a historic moment,” the architect said. “For now, for the moment, we get to take back our dignity.”

Berlusconi’s resignation is expected to usher in a new Italian government led by Mario Monti, a former European commissioner who spearheaded an antitrust suit against Microsoft and is well regarded by the financial establishment in the West.

But it remains to be seen whether Monti, an economist, can build the support needed in Italy’s Parliament to carry out austerity measures -- including pension reform, labor law changes and cuts in public spending -- that are highly unpopular.

On another side of the government square, teachers assembled to air their complaints, and their fear that things will get even worse.

Graziella Zola, an elementary-school teacher for 25 years, said she was earning just 1,200 euros ($1,650) a month. Worse than that, she said, cutbacks already have made schools overcrowded. “They’re making our classes like chicken camps,” she said.

This austerity program “is a tough, tough path to take,” said Francesco Rutelli, a member of the center-left opposition Democratic Party. But he said there was no real choice. “We are convinced it was the only solution for the country.”

Berlusconi made no public statement, but insiders told Italian journalists that he was deeply hurt by the insults hurled at him by the public, even as the mood at many gathering places was festive.

One of the largest crowds formed on the square of the Quirinale, the home of Italy’s president, Giorgio Napolitano.

Throughout the day, Berlusconi was said to have been inside the main government building, conferring with his allies and preparing for his last hours as prime minister. He had a two-hour lunch with Monti and a couple of other close associates. (For the austerity vote, he was said to have gone into the Parliament chamber through an underground passageway from his building.)

Then at 9 p.m., Berlusconi went to the Quirinale to formally tender his resignation to the president. Shouts from the crowd outside erupted: “Resign! Resign! Fool! Fool!”

After about 45 minutes, Berlusconi’s car left the palatial grounds. Moments later, a statement from the Quirinale announced Berlusconi’s resignation. And then the crowd broke into song and dance.

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Special correspondent Livia Borghese contributed to this report.