The Italian job

It’s not just the women of Italy who are cheering the downfall of Italy’s creepy prime minister and notorious sex scoundrel Silvio Berlusconi; global markets gave a shout of abbondanza!

American investors set stocks alight yesterday on news that the embattled prime minister, who’s held power in Italy since 1994, bowed to pressure to resign amid growing doubts over his ability to lead the debt-ridden nation to safer ground.

Berlusconi said he would step down from his role as prime minister as early as next week, paving the way for President Giorgia Napolitano to rejigger the government or call elections.

The Dow Jones industrial average, which has been on a winning streak on signs of political change in Europe, jumped close to 100 points on the news.

The Dow, which had been trading slightly above its opening price of 12,055 at the time of the announcement, around 1:45 p.m. Eastern time, ended the day up 101.79 points, or 0.84 percent, to 12,170.18.

“This was an important first step,” said Barry Knapp, the chief portfolio strategist with Barclays Capital in New York. “No one really trusted the Berlusconi government.”

The third richest man in Italy, with assets worth $9 billion in 2010, Berlusconi’s bio reads like a Mario Puzo novel, including criminal trails, sex scandals, signs of corruption and allegations of mob ties.

Indeed, Italy’s longest serving post-war prime minister has watched his power wane amid a spate of ugly sex scandals, including a trial involving an underage prostitute, which critics say have distracted him from the nation’s burgeoning debt crisis.

As recently as Monday, Berlusconi took to Facebook to deny rumors that he would resign.

“Reports of my resignation are completely unfounded and don’t know where they have come from,” the billionaire leader said on Facebook.

But yesterday, President Napolitano put out an e-mail statement saying that Berlusconi had in fact agreed to resign following a parliamentary vote on the country’s austerity plans that is coming next week.

The resignation followed Berlusconi’s failure early yesterday to gain a majority for his party during a routine parliamentary ballot.

Berlusconi confirmed the news of his demise in an interview with an Italian television station he owns, citing the parliamentary vote.

Berlusconi is the highest-profile European leader to get whacked on the continent’s growing financial woes, which have become a sore point for US investors.

His resignation comes amid a spate of power shifts across Europe as the continent grapples to keep the threat of default under control.

Last week Greek Prime Minister George Papandreou agreed to step down as confidence in his ability to save Greece faltered.

Knapp warned Europe’s financial problems may still take years to resolve.

“I think from a political perspective, there’s some reason for optimism. But by no means is this the end of the problem,” he said.