Berlusconi not to stand for reelection as Italy's PM
Italian Prime Minister Silvio Berlusconi will not stand for reelection but will stay in his job until his austerity package has been passed. Asian markets rallied on the news that he had promised to go but and Italian bond yields hit 7.0 per cent after falling during Asian hours.
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Speaking to one of his own TV channels, Berlusconi said it was time for a new generation to
take over in Italian politics and confirmed that he would not be a candidate for prime minister come the next election, which he wants to be held as early as February.
Earlier he had said that he would resign but not until a new package of economic measures aimed at saving Italyβs ratings with international agencies has become law.
The yield on Italian 10-year bonds fell to 6.65 per cent, down from 6.77 per cent before the announcement, but then rose to 7.0 per centΒ during the morning European hours. Portugal and Ireland were forced to seek bailout packages when their bond yeilds hit 7.0 per cent.
Markets were also boosted by news that inflation in China slowed sharply last month, raising the prospect that the government might ease monetary policy.
Berlusconiβs announcement followed a vote on budgetary legislation that showed that his coalition had lost its parliamentary majority.
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