‘This is certainly not an easy moment’, says Italy’s Berlusconi

Prime Minister Silvio Berlusconi tried to calm fears that Italy could be swept into a full-scale financial crisis and the opposition pledged to smooth the passage through parliament of tough debt-cutting measures today.

In a gravely worded statement, Berlusconi, who normally exudes optimism and who has hitherto boasted of his government's success in keeping out of the crisis, said Italy had overcome even more difficult moments in its past. "We must be united, cohesive in our common interest, conscious that the efforts and sacrifices of a brief period will correspond to permanent and secure gains," he said.

"For us, for Italy, this is certainly not an easy moment," Berlusconi said in a statement which followed a chaotic morning on financial markets in which Italian 10-year bond yields climbed past 6 percent, their highest level in a decade.

"The actions under discussion in parliament will accelerate the reduction of the debt. Already this year, we will bring the primary balance into significant surplus," Berlusconi's statement said. "The crisis is pushing us to accelerate the process of correction extremely rapidly, to strengthen its content, to fully define further steps to bring the budget into balance by 2014."

Earlier, Economy Minister Giulio Tremonti left a meeting of euro zone finance ministers early to return to Rome to wrap up approval of a 40 billion euro ($56 billion) package of austerity measures expected to be passed in parliament in the coming days.

Tremonti has overseen a four-year, 40 billion-euro austerity package designed to bring the budget into balance by 2014, including measures to cut funding to local government and health services, and delay retirement.

The austerity measures still require approval in parliament but both government and opposition have indicated they want the package passed quickly to reassure markets.

Senate President Renato Schifani said he would urge the heads of the different party groups to pass the measures in the upper house on Thursday.

Italy's main opposition group, the centre-left Democratic Party, called for the package to be approved by the end of the week, while the ruling centre-right PDL party was expected to back whatever Tremonti suggested.