The uncommon burst of activity will enable Italy’s lower house to complete parliamentary approval of the package today. Berlusconi promised this week to resign once the measures were approved, permitting a new leader to be appointed as the head of a technocratic government. He is expected to step down either today or tomorrow.
Mario Monti, a former European commissioner, has been widely mentioned as a likely front-runner, and he could take over as early as Monday.
In Greece, following similar maneuvers to replace elected leaders with respected, veteran officials known for their expertise rather than their political skills, Lucas Papademos, the prime minister-designate chosen by the three-party coalition, unveiled his Cabinet choices, who were sworn in by midafternoon.
Finance Minister Evangelos Venizelos - the public face of the country’s austerity effort - will remain in his post, as will other important ministers of the outgoing government of George A. Papandreou, the former prime minister. Papademos also brought in several members of opposition parties.
Days of political turmoil roiled bond markets this week, pushing the cost of borrowing in Italy to levels that economists regard as unsustainable and adding to the pressures on politicians. The yield on Italy’s 10-year bond, a barometer of investor anxiety, eased back to about 6.6 percent yesterday after having exceeded 7 percent at the height of the crisis.
By other measures, the promised changes in Greece and Italy heartened investors as well, at least for the moment: the leading stock market indexes in Britain, France, and Germany all gained yesterday, and the rally extended to Wall Street, where the Dow Jones industrial average jumped 260 points, or 2.2 percent, to close at 12,154.
In foreign exchange trading, the value of the euro rose to nearly $1.37 from $1.35 the day before.
Despite the financial market reaction yesterday, deep-seated worry persists about Europe’s efforts to prevent the debt crisis from plunging the entire global economy into retreat.
