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Berlusconi departure won't be a quick fix for Italian economy

Italian Prime Minister Silvio Berlusconi (R) speaks with Economy Minister Giulio Tremonti during a news conference at the Chigi palace on Aug. 5, 2011.

Jeremy Hobson: We'll start in Italy, where worries about the country's finances have sent borrowing costs to a new record this morning. The Italian Parliament is about to vote on public finances and if the vote fails, it could spell the end of Prime Minister Silvio Berlusconi's leadership.

For more, we're joined live from Rome by the BBC's David Willey. Good morning.

David Willey: Good morning.

Hobson: So David, do Italians think that getting rid of Berlusconi would calm the markets?

Willey: In a sense I think Mr. Berlusconi has already departed -- his departure has been discounted by the markets. They rallied a bit, they've been very volatile over the past few days.

But Italy's borrowing costs have grown to the extent that the experts are saying they've reached a point where it's not going to be possible for Italy to service its debts in the future and this is really very worrying.

Hobson: And you've been reporting from Italy, David, since the '70s. How significant would it be if Berlusconi goes because of this debt crisis?

Willey: Well, it brings an era of Italian political life to an end. Mr. Berlusconi has dominated Italian politics for almost two decades and his departure would be a radical change. But of course, there is no quick fix here.

Italy though, is the third biggest economy in Europe, in the European Union and it does have -- for example -- big gold reserves. This is not a country teetering on the edge of complete bankruptcy, it's simply lost credibility under Mr. Berlusconi. And Italians hope that if he departs -- when he departs -- that things might get better, but it's going to take time.

Hobson: The BBC's David Willey in Rome, thanks David.

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