MILAN ? Premier Silvio Berlusconi has averted an immediate government crisis and given fresh impetus to an European Union summit aimed at saving the euro with an overnight deal on emergency growth measures demanded by the EU,
Berlusconi and Northern League leader Umberto Bossi reached a compromise on raising Italy's pension age in late-night parliament talks Tuesday ? a point of disagreement that had threatened Berlusconi's leadership. His majority in parliament needs the support of the Northern League to guarantee his policies.
Berlusconi plans to deliver a letter with Italy's emergency measures to the summit later Wednesday. A spokesman said the contents are reserved for summit leaders, but Italian media reported that the measures include new infrastructure spending, with a push for more private investment for strategic projects, the privatization of public entities and property and simplifying rules for companies.
Changes to Italy's pension scheme had become a major sticking point, with Bossi's party refusing to risk alienating its constituency of workers from the productive north.
Under the overnight deal, Italy will gradually raise the pension age for all workers to 67 by 2025, bringing it in line with European trends. Currently, men in all sectors and women in the public sector retire at 65.
The 15-page letter also reportedly contains details of the euro54 billion ($75.16 billion) in austerity measures passed by lawmakers last month to balance the budget by 2013.
Italy is seen as the next country at risk in the widening sovereign debt crisis, but with euro1.9 trillion in public debt a default would be disastrous for the global economy. The European Central Bank has been buying billions in Italian bonds to help keep borrowing costs down.
Nonetheless, Italy saw borrowing costs on short-term bonds spike on Wednesday. The Italian Treasury sold euro8.5 billion ($11.83 billion) in six-month bonds at 3.53 percent, up sharply from last month's 3.071 percent.
A Berlusconi spokesman, meanwhile, brushed off reports that Berlusconi was preparing to resign. The left-leaning La Repubblica newspaper, one of Berlusconi's staunchest critics, reported that he had threatened to resign if no deal could be reached with the League. It did not cite sources, but quoted Berlusconi during the private meeting as saying, "I don't know what to do. It is clear I cannot go to Brussels without a deal with Bossi."
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