The economic situation in Italy is worrying investors and may have cost its prime minister his job. Like Greece, Italy is facing pressure to make unpopular cuts in government spending. Prime Minister Silvio Berlusconi has been seeking to enact measures meant to satisfy his country's creditors. The interest rate Italy can expect to pay for borrowing money is increasing and recently passed seven percent.
This week, Mister Berlusconi won a budget vote in Italy's lower house of parliament.
TRANSLATOR: Three-hundred-nine attending, three-hundred-eight in favor, one boycotted, no vote against the chamber approves..."
But the prime minister lost something else. A majority of lawmakers in the lower house refused to vote. It appeared Mister Berlusconi had lost their support. He announced on Tuesday that he would resign after parliament passes budget cutting measures.
Italian government debt is about one hundred twenty percent the size of the country's economy. That is second only to Greece in Europe. Greece, Ireland and Portugal have all required rescue loans to help them pay creditors. But unlike those nations, Italy has the third largest economy using the euro. And it is among the ten largest economies in the world.
On Monday, European finance ministers met in Brussels to discuss the deepening debt crisis among nations using the euro. European Union Economic and Monetary Affairs Commissioner Olli Rehn said Italy needs to enact reforms.
OLLI REHN: "[It is] essential now that Italy will stick to its fiscal targets, ensure their implementation and intensify the structural reforms that can boost growth and job creation."
Unlike Greece, Italy's budget deficit is not out of control. Of greatest concern, however, is Italy's lack of growth and job creation.
Financial officials and market watchers are also concerned that Italy's debt problems may be too big to solve for the seventeen nations using the euro. European leaders have yet to agree on the size and conditions of a rescue fund, or plan.
In Brussels, Dutch Finance Minister Jan Kees de Jager said the rescue fund needed to be bigger. But he said budget reform of euro nations was important, too.
JAN KEES DE JAGER: "We have to increase the capacity of the emergency fund, that's very important, but it's not the only thing. Economic reforms and budget cuts in countries currently under attack of the financial markets are at least as important than more money in the emergency fund.''
On Wednesday, Italian President Giorgio Napolitano named former European commissioner Mario Monti a Senator for life. Mister Monti is now considered a leading candidate to replace Mister Berlusconi.