Berlusconi Steps Down, and Italy Pulses With Change

Rome – Marking the end of a tumultuous week and of an era in Italian politics, Prime Minister Silvio Berlusconi resigned Saturday evening after Parliament approved austerity measures sought by the European Union.

The lower house passed the measures on Saturday by a vote of 380 to 26, a day after they were approved by the Senate, trying to keep a step ahead of market pressures that sent borrowing rates on Italian bonds skyrocketing last week to levels that have required other euro zone countries to seek bailouts.

The vote, and Mr. Berlusconi’s resignation, come amid thebiggest crisis facing the European Union in decades, in which the power of financial markets has upended traditional democratic processes.

Pressured by European leaders struggling to shore up the euro against speculative attacks, Prime Minister George A. Papandreou of Greece resigned last week to make way for a technocrat-led unity government. Mr. Berlusconi followed suit, a rare about-face for a leader known for his perseverance and his refusal to bow to critics.

The end of Mr. Berlusconi’s 17-year hold on Italian politics sets off the country’s most significant political transition in 20 years.

“This is the most dramatic moment of our recent history,” Ferruccio de Bortoli, the editor of the Milan daily newspaper Corriere della Sera, said earlier on national television.

The streets of Rome pulsed with a sense of historic change. Many cheered Mr. Berlusconi’s exit. Outside the Palazzo del Quirinale, the presidential palace, a choir and orchestra performed Handel’s “Hallelujah” chorus.

President Giorgio Napolitano, who as head of state will oversee the transition, was expected to begin consultations with party leaders to nominate a prime minister immediately after Mr. Berlusconi’s resignation.

On Saturday, the president appealed to lawmakers to put the country’s interests above their own. “All political forces must act with a sense of responsibility,” Mr. Napolitano said.

The front-runner to guide a new government appears to be Mario Monti, 68, a former European commissioner and a well-respected economist with close ties to European Union officials. On Wednesday, Mr. Napolitano named Mr. Monti a senator for life, an unexpected move seen as a prelude to receiving the mandate to form a government.

In a sign of intense deal-making ahead of a delicate political transition, Mr. Monti met with Mr. Berlusconi and two of his close advisers on Saturday at the prime minister’s office.

Earlier, Mr. Monti met with Mario Draghi, the recently installed president of the European Central Bank, reinforcing the notion that financial and European institutions strongly support the appointment of the respected economist in a moment of economic and political turbulence.

The mandate of the next government will be to push through measures to help reduceItaly’s $2.6 trillion public debt and increase growth to keep the country competitive.

The austerity measures approved by Parliament include selling state assets and increasing the retirement age to 67 from 65 by 2026. They would decrease the power of professional guilds, privatize municipal services and offer tax breaks to companies that hire young workers.

Italy’s political parties were fighting to maintain their positions in a new government and to ensure their futures would not be doomed by passing the unpopular measures demanded of tough economic times.

The main obstacle to Mr. Monti’s government could come from Mr. Berlusconi’s increasingly divided center-right coalition. Many members would rather go to early elections than have a technocrat backed by the European Union foisted on them.

“I don’t believe the markets should decide governments,” the minister of infrastructure and transportation, Altero Matteoli, said Friday in an interview on Sky Tg24.

The clash over Mr. Monti raised concerns across the political spectrum about the growing influence of financial markets in democracies. In Italy and elsewhere, a dysfunctional political class has been “impotent” in the face of market dynamics and their impact on people’s lives, the commentator Luigi La Spina wrote Saturday in the Turin daily newspaper La Stampa.

But the main opposition party and other lawmakers, fearing that elections would lead to an unsustainable period of market turmoil, support a transitional government.

The prospects of a Monti government have revealed the “very eccentric” nature of Italian politics, said Norma Rangeri, editor in chief of the left-wing daily newspaper Il Manifesto. Mr. Monti, she said, is a liberal conservative whose nomination is being blocked by the center-right, while the center-left, which supports him, “should be looking for the opposite of what Monti represents.”

“What is opening is the most uncertain scenario that we can imagine,” she said.

Dozens of television cameras and bystanders gathered in front of Palazzo Chigi, the prime minister’s office, on Saturday, awaiting Mr. Berlusconi’s resignation, and the beginning of whatever comes next.

Fulvia Roscini, 47, a nurse, was there with her 8-year-old son and 13-year-old daughter. “We came here because I wanted my kids to see this,” she said, “to see that another country is possible and is already here.”

Gaia Pianigiani contributed reporting.