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Pier Paolo Cito, Associated Press
Italy's Justice Minister Nitto Palma, left, and Finance Minister Giulio Tremonti sit during a voting session on economic reform measures demanded by the European Union, that should pave the way for Premier Silvio Berlusconi to leave office in a matter of days, at the Senate in Rome, Friday, Nov. 11, 2011. The prospect of a transitional government headed by respected non-partisan economist Mario Monti calmed markets for a second day, with Italy's 10-year borrowing rate down a further 0.21 percentage point to 6.59 percent. Shares were buoyant too, with the Milan stock index was up 1.7 percent in early trading at 15,477.

ROME — Italy's Senate has approved economic reforms demanded by the European Union, paving the way for Premier Silvio Berlusconi to resign as early as this weekend and a new government to be formed.

The Senate voted 156-12 Friday to pass the budget bill, which contained the reform measures. The lower Chamber of Deputies is expected to approve the legislation by Saturday.

Berlusconi has promised to resign as soon as parliament passes the reforms.

There are mounting indications that respected economist Mario Monti will be tapped to head a transitional government to push through even more difficult reforms to pull Italy back from a Greek-style economic crisis that would threaten the existence of the entire eurozone and cause a global recession.