Silvio Berlusconi has resigned!

Silvio Berlusconi has resigned as Italian prime minister.

President Giorgio Napolitano is likely to accept his offer and appoint Mario Monti, a technocrat, as his successor.

Silvio Berlusconi lost his majority amid an acute debt crisis that threatens the eurozone. He promised to go once MPs had approved new austerity mesasures.

Silvio Berlusconi is Italy’s longest-serving post-WWII PM – having dominated political life for 17 years. His premiership has recently been marred by many scandals.

Crowds gathered outside the parliament, shouting “Resign” and “Bye bye Silvio”. Later, groups outside the president’s and prime minister’s offices shouted abuse, calling Silvio Berlusconi a “buffoon”.

Silvio Berlusconi said he felt “embittered” after hearing the insults.

After losing his parliamentary majority on Tuesday, Silvio Berlusconi promised to resign after austerity measures, demanded by the EU and designed to restore markets’ confidence in the country’s economy, were passed by both houses of parliament.

Members of the lower house voted 380-26 with two abstentions on Saturday, a day after the Senate approved the measures that have now been signed into law.

After accepting Silvio Berlusconi’s resignation, Giorgio Napolitano is expected to formally ask Mario Monti or another candidate to form a government of technocrats.

Italy’s leaders are desperate to signal that they can bring the country’s finances under control and they are moving fast.

Mario Monti, a well respected economist, is exactly the sort of man that the money markets would like to see take charge at this time of crisis, but there is significant opposition to him within the country.

The austerity package foresees 59.8 billion euros in savings from a mixture of spending cuts and tax rises, with the aim of balancing the budget by 2014.

Measures include:

* An increase in VAT, from 20% to 21%

* A freeze on public-sector salaries until 2014

* The retirement age for women in the private sector will gradually rise, from 60 in 2014 until it reaches 65 in 2026, the same age as for men

* Measures to fight tax evasion will be strengthened, including a limit of 2,500 euros on cash transactions

* There will be a special tax on the energy sector

On Wednesday, the interest rate on 10-year Italian government bonds touched 7%, the rate at which Greece, Ireland and Portugal were forced to seek bailouts from the EU.

An EU team has begun work in Rome, monitoring how Italy plans to cut its crushing debt burden, 120% of annual economic output (GDP).

The Italian economy has grown at an average of 0.75% a year over the past 15 years.

Silvio Berlusconi has been prime minister three times since he first took office in 1994. He has described himself as Italy’s best head of government since the country was created nearly 150 years ago.

Silvio Berlusconi is currently involved in several trials for fraud, corruption and having sex with an under-age girl, and has attracted media attention for so-called “bunga-bunga” parties which young women were allegedly paid to attend.

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