Italy MPs struggle to hold back eurozone debt crisis
Under persistent attack by speculators on international bond and security markets, Italian politicians are scurrying to improve their image at home and abroad, and their country's financial credibility.
Embattled Economics Minister Giulio Tremonti dashed back to Rome on Tuesday - abandoning an EU finance ministers' meeting in Brussels - to confer with the government and opposition leaders about his proposed 40bn euro (£35bn; $56bn) austerity package, which was unveiled to howls of protest by industrialists and workers alike two weeks ago.
Italian President Giorgio Napolitano made an umpteenth appeal to squabbling politicians to ignore their partisan differences in the interests of national solidarity at this critical moment.
Prime Minister Silvio Berlusconi has remained unusually silent during four days of sinking Italian bank shares, but he too made a dramatic appeal for national unity.
Abandoning his usually optimistic tone, Mr Berlusconi declared that Italy is "in the front lines of an economic battle" and must "accelerate the process of austerity within a very short time frame". But he defended the solvency of Italy's banks, describing them as "solid, and sheltered from the blows that foreign banking institutions have suffered".
A regular Italian 12-month bond auction was fully subscribed, but analysts say there is basically no quick fix to the two most important impediments to any quick solution to the country's sluggish economic image.
These are: Italy's towering 120% of GDP national debt, and an extremely poor growth record - with equally poor prospects of future growth - under successive Berlusconi governments.
The debt mountain is a heavy economic burden which threatens to become potentially suffocating as the government's borrowing costs increase day by day.
The danger that Italy might go the way of Greece or Portugal and risk a default on its sovereign debt appears to have concentrated minds at a moment when the country has appeared to many local and foreign observers to be drifting rudderless.
The Senate, Italy's upper house of parliament, pushed ahead with plans to vote within two days on an amended austerity package that could become law within a week. Opposition parties say they will not delay the passage of the austerity bill by tabling endless amendments, as usually happens when the government proposes belt-tightening measures.
Ordinary Italian families appear nervous at the gravity of the crisis and are cutting spending at a time of the year when traditionally they go to the seaside or the country for a long summer break to escape the torrid heat of the cities.
Only one in five Italian families plans to take a vacation this year, according to a leading consumer association in Milan, and most of them are contemplating staying away from home for not more than a week. Last year about half the population took a summer holiday.
People phoning in to a radio talk show on the state broadcaster RAI on Tuesday were alternately panicky and angry at the government for failing to come to grips with the dire economic picture being painted every day in the local media. "If we are the victims of speculators in both near and distant countries, can this be called democracy?" one woman listener asked.
"We have to plug the leak," says Massimo Mucchetti, economic reporter on Milan's authoritative daily Corriere Della Sera. "We don't want a kid playing the stock market on the west coast of America to put a country like ours - of which he hasn't got the faintest knowledge - in serious jeopardy."
If the result of this week's scare of a possible Italian default in the eurozone has been to foster a temporary sense of national unity, the future of Mr Berlusconi's centre-right coalition remains uncertain.
The government is embroiled in a series of corruption scandals involving the prime minister himself and many of his associates. One of his ministers has just been indicted on Mafia-related charges; and his Fininvest holding company, run by his daughter Marina, has just been ordered to pay out $800m compensation and damages to a rival conglomerate in connection with a two-decade-old corruption case.
A criminal court has already established that Mr Berlusconi was responsible for bribing a Rome judge to rule in favour of Fininvest when the case went to arbitration. Mr Berlusconi escaped conviction only because charges had been dropped due to the Statute of Limitations running out.
A quick passage through parliament of the austerity package may grant Italy a brief breathing space in the present crisis.
But the structural and systemic faults of Italy's political and economic governance have not even begun to be tackled, and although the beleaguered prime minister's popularity has plunged to an all-time low of under 30%, no obvious successor is in sight.