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Italy readies for crucial budget vote amid calls for Berlusconi to quit

As Italy prepares for a crucial vote on its budget Tuesday afternoon, members of Silvio Berlusconi's party are threatening to rebel, putting the prime minister's majority at risk. Meanwhile his closest coalition ally has told the PM to quit.

Italy berlusconi austerity eu summitEnlarge
Italian Prime Minister Silvio Berlusconi prior to a European Council meeting on Oct. 23, 2011. The euro zone is aiming to nail down a solution to the worst economic crisis in its history, as the spotlight falls on Italy amid contagion fears. (Eric Feferberg/AFP/Getty Image) (ERIC FEFERBERG)

As Italy prepares for a crucial vote on its budget set for Tuesday afternoon, the government has been told it must answer questions on its plans for reform by the end of the week.

The European Union's Economic Affairs Commissioner Olli Rehn made the comments after it was revealed that Italy's borrowing costs had risen to the highest level since the creation of the euro in 1999 , Agence France Press reported.

Read more on GlobalPost: Italy invites IMF to monitor debt progress

Prime Minister Silvio Berlusconi rejected rumors that he would resign over the news. Berlusconi has survived dozens of confidence votes during his tenure.

But ahead of Tuesday's vote, in what is seen as the strongest call for his departure yet, his key coalition partner called on the prime minister to go.

Umberto Bossi, head of the Northern League, has urged Berlusconi to stand aside and allow former justice minister Angelino Alfano to take his place, the BBC reported.

Read more on GlobalPost: Italy - Austerity, Berlusconi-style

Italian lawmakers will vote on the country’s state financing bill, which is usually procedural – but has become crucial amid rumors of a reported rebellion by some Berlusconi supporters, the BBC reported.

The vote is set to reveal whether Berlusconi retains a majority in the 630-seat house.

Five members of his PDL party have threatened to abstain from the vote, Reuters reported.

The euro fell for a third day ahead of the vote amid concerns the region’s debt crisis is spreading, Bloomberg reported.

Euro zone finance ministers meeting in Brussels over the Greek crisis also discussed Italy, whose economy was put on surveillance at last week's G20 summit in Cannes.