ITALY’S senate last night approved the government’s disputed austerity package, aimed at reducing the country’s deficit by more than €54 billion over three years.

The leader of Italy’s largest union is threatening a general strike against an austerity package that premier Silvio Berlusconi’s government pushed through to balance the budget by 2013 and avoid financial collapse.

ITALY’S cabinet last night approved a €45.5 billion austerity budget — its second in weeks in a bid to calm investors, with measures including more taxes on high earners.

Italian premier Silvio Berlusconi’s government is today holding an emergency meeting to pass new measures to balance the budget by 2013 and calm market concerns over the country’s public finances.

ITALIAN Economy Minister Giulio Tremonti pledged to meet European Central Bank demands for sweeping economic reforms in exchange for help in shielding Italy from the eurozone debt crisis.

PRIME Minister Silvio Berlusconi agreed yesterday to accelerate plans to restore Italy’s public finances after a day of hectic telephoning with international partners alarmed at the escalating crisis over Italian debt.

Italy tonight pledged to work for a constitutional amendment requiring the government to balance its budget in a bid to ressure domestic and foreign investors that its finances are sound.

EUROPEAN policymakers tried to turn a more powerful fire hose on the eurozone debt crisis yesterday but financial markets were unimpressed with their response.

ITALIAN Prime Minister Silvio Berlusconi, facing record bond yields and calls for his resignation, said Italy is “up to the task” of tackling the debt crisis as its economic fundamentals are solid.

THE European Union voiced support for Italy and Spain under attack on financial markets but acknowledged that investors now doubt whether the eurozone can overcome its sovereign debt woes.

Italy’s borrowing rates hit a new euro-era high today as a global market sell-off reignited fears that the debt crisis will engulf the eurozone’s third-largest economy.

FINANCIAL market pressure on Italy intensified last night, sucking Europe’s second biggest debtor nation deeper into the euro area danger zone and prompting emergency consultations in Rome, Madrid and other European capitals.

ITALIAN and Spanish 10-year bonds dropped yesterday, pushing yields up to euro-era records versus benchmark German bunds, on concern that slowing growth will hamper efforts to tame the nations’ debt loads.

European financial markets were slammed today by fears that Italy and Spain would be dragged into the debt crisis.

Taoiseach Enda Kenny and Finance Minister Michael Noonan have both welcomed an agreement which could improve the terms of Ireland’s EU/IMF bailout deal.

ITALIAN Prime Minister Silvio Berlusconi’s main coalition ally has warned the government could collapse over an unpopular austerity plan.

Beleaguered premier Silvio Berlusconi has come under pressure on two fronts: his crucial coalition ally demanded tax cuts or early elections, and Italy's credit rating appeared in danger due to high public debt and a laggard economy.

FINANCE Minister Michael Noonan took the fight over corporation tax to France when he said its attempts to increase Ireland’s rate were perverse.

PRIME MINISTER Silvio Berlusconi said yesterday he had no intention of stepping down and dismissed a weekend demonstration by women across Italy over his involvement in a sex scandal.

IRELAND has been advised to “think outside the box” by the Hungarian finance minister, Gyorgy Matolcsy, whose government rejected IMF and EU demands for austerity measures earlier this year.

Italian Premier Silvio Berlusconi pleaded with MPs for his political life today on the eve of crucial confidence votes.

THE EU will sign the loan agreement with Ireland before Christmas and be ready to raise the bailout money in the new year, the head of the European Financial Stability Fund announced following last night’s eurozone finance ministers meeting in Brussels.

Taoiseach Brian Cowen tonight flatly denied Ireland has approached Europe for emergency funds.

Leading eurozone countries today moved to calm nerves over a possible European Union bailout of Ireland.

IRELAND’S stock market reacted favourably to the bond sale with shares closing up 0.6% but Italy’s finance minister said dark clouds are gathering.

Ministers have approved €24.3bn in budget cuts for 2011-2012 to protect Italy from the market speculation that pushed Greece to the brink of bankruptcy.

Italy was bracing itself for spending cuts as the government prepared to put its accounts in order to protect the nation’s high debt load from market speculation.

BOB GELDOF grilled Silvio Berlusconi in an interview published yesterday, telling him Rome’s failed pledges on aid put the Italian premier’s credibility in doubt as he chairs a G8 summit this week.

A top Italian court confirmed the slim electoral victory of centre-left leader Romano Prodi in the lower house of parliament, although premier Silvio Berlusconi’s conservative coalition was not conceding defeat.

A top Italian court tonight confirmed the slim electoral victory of centre-left leader Romano Prodi in the lower house of parliament, although was not conceding defeat.

A top Italian court today confirmed the slim electoral victory of centre-left leader Romano Prodi in the lower house of parliament.

Italy’s Premier Silvio Berlusconi said today that the European Union should intervene in the planned French energy merger aimed at blocking a potential hostile bid from Italian energy company Enel.

Talks begin today towards sealing a controversial merger deal between state-owned gas producer Gaz de France and utility company Suez that would create a world energy leader and block a hostile bid from Italy.

Prosecutors have notified the embattled governor of the Bank of Italy that he is under investigation for his role in a takeover battle between two banks, and that they plan to question him, his lawyer said yesterday.

Italy is today said to be “paralysed” after the economy minister resigned amid a standoff with the Bank of Italy chief.

ITALY'S Finance Minister Domenico Siniscalco sensationally resigned yesterday after he failed to persuade Bank of Italy Governor Antonio Fazio to quit.

Silvio Berlusconi was sworn in as premier of Italy’s 60th government in as many years today, after naming a team of ministers that closely resembles the one he led until stepping down days earlier during a power struggle with allies.

Conservative leader Silvio Berlusconi formed a new government today, presenting a list of ministers to Italy’s president.

Opposition to his candidate for a key EC post left Prime Minister Silvio Berlusconi with a tough decision today: Whether to stand by his choice or give in to protests over the conservative Catholic’s positions on gays and the family.

EC President Jose Manuel Barroso backed down today only hours before the European Parliament appeared set to veto his 24 member executive.

Pedro Solbes, EU economic and monetary affairs commissioner, has denied that the EU Stability and Growth Pact is suspended.

The EU’s Stability Pact is like the Ten Commandments – they all had to be adhered to, said Finance Minister Charlie McCreevy in Brussels.

European Union finance ministers have endorsed common disclosure requirements to make it easier and cheaper to raise capital across the 15-nation bloc.

ITALIAN prime minister Silvio Berlusconi, facing a German tourism boycott that would cost his country millions of pounds, yesterday came under fire from one of his closest political allies.