MICHELE NORRIS, Host:
And this week, Italy became the front line in the battle to save the euro. Italy is the eurozone's third largest economy, and it's facing its own debt crisis. Recently, the European Central Bank made the unprecedented decision to dictate budget-cutting policy to Italy. As NPR's Sylvia Poggioli reports, the prime minister now has to accelerate tough austerity measures.
SYLVIA POGGIOLI: As soon as he got his new marching orders, Berlusconi promised to deliver. Financial analyst Danilo Caselli says with that letter, the government's decision-making powers were sharply cut back.
DANILO CASELLI: (Through translator) It's clear that our government has been put into receivership by the European Central Bank. Our course has been charted. All Italians will have to undergo very painful austerity measures for the next three years. The question now is to see exactly what they will be.
POGGIOLI: Business leaders are also worried that more austerity measures will further curb economic growth, which has been stagnant for a decade. Massimo Muchetti is an editorialist for the authoritative daily Corriere della Sera.
MASSIMO MUCHETTI: Berlusconi has been uncharacteristically silent for the last several days. He has come under sharp criticism for ceding crucial policy-making to the ECB. Opposition leader Antonio Di Pietro says Berlusconi's time is up.
ANTONIO DI PIETRO: (Through translator) A country that is under surveillance is not free, not democratic, is incapable of instilling respect in its institutions. The only solution is for Berlusconi to step down.
POGGIOLI: There is also much malaise within Berlusconi's own party at the sudden turn of events. Guido Crosetto is undersecretary of defense.
GUIDO CROSETTO: (Through translator) It is worrisome to think that the European Central Bank can put a country into receivership - be it Italy, Greece or whatever. And in the coming months, we have to ask ourselves whether national sovereignty still has any meaning.
POGGIOLI: Sylvia Poggioli, NPR News, Rome.
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