Italy PM Silvio Berlusconi resigns as parliament approves EU-demanded reforms

Italian Premier Silvio Berlusconi resigned on Saturday after parliament's lower chamber passed European-demanded reforms, ending a 17-year political era and setting in motion a transition aimed at bringing the country back from the brink of economic crisis.

Italian lawmakers had early on Saturday given their approval to austerity measures demanded by the European Union (EU), paving the way for the resignation of Italian Prime Minister Silvio Berlusconi and the formation of a new government.

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Italy's lower house of parliament passed the measures, a day after the Italian Senate approved the package aimed to stave off bankruptcy, Xinhua reported.

Italy's state debt stands at about 1.9 trillion euros ($2.6 trillion).

Earlier this week, Berlusconi had said he would resign after the government finally approves the new law that includes among others, labour reform proposals, aimed at increasing employment among women and young people, and a sell-off of state-owned assets and agricultural land.

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Berlusconi is believed to be replaced by the former European Commissioner Mario Monti.

A chorus of Handel's "Alleluia," performed by a few dozen singers and classical musicians, rang out in front of the president's palace as thousands of Italians poured into downtown Rome to rejoice at the end of Berlusconi's scandal-marred reign.

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Hecklers shouted "Buffoon, Buffoon!" as Berlusconi's motorcade entered and exited the presidential palace, where he tendered his resignation to President Giorgio Napolitano, the palace said in a statement.

Respected former European commissioner Mario Monti remained the top choice to try to steer the country out of its debt woes as the head of a transitional government, but Berlusconi's allies remained split over whether to support him.

- With inputs from agencies