On Tuesday, the 75-year-old leader best known for verbal gaffes, "bunga bunga" sex parties, and a steady stream of legal troubles, lost a key parliamentary vote. After several hours of reflection and meeting with his children and close advisors, [Silvio] Berlusconi told Italian President Giorgio Napolitano he would relinquish his power after the latest Italian emergency austerity package is approved by parliament.

Berlusconi’s Achilles’ heel was his economic policy. In the face of the European debt crisis, his government came apart at the seams. Although the 2010 budget report required for the implementation of austerity measures was finally passed on Tuesday afternoon, his strategy for dealing with Italy’s mounting economic woes—spending cuts, job cuts, and tax increases—has come under attack from all sides in recent weeks. Confindustria (an Italian business group), the European Central Bank, and CGIL and CSIL (Italy’s major labor unions) have all criticized Berlusconi’s proposals as a recipe for higher unemployment, limiting economic growth, and punishing the lower-middle class. Then, on October 3, Moody’s downgraded Italy’s debt rating, and a week later a first draft of the budget report was rejected by parliamentarians. On Tuesday morning traders began demanding record yields for Italian bonds in a clear indication of falling market confidence in his leadership.

Already weakened by incessant scandals, the economic downturn pushed the prime minister’s popularity to a low of 24 percent. According to some polls published in the week before his resignation announcement, some 62 percent of Italians wanted the prime minister to step down. On October 15, 150,000 demonstrators furious at worsening conditions and Berlusconi’s proposed austerity measures took to the streets, with some hundreds attacking shops, government buildings, and riot police seemingly indiscriminately.

The failure of the Italian center left to elaborate clear policy alternatives also fits within a broader trend in European politics. It is not just the PD but rather European opposition parties on both the left and the right that have been unable to propose any alternative to sweeping cuts as a solution to the mounting debt crisis.

Perhaps the most striking example is provided by Greece. Although former Prime Minister George Papandreou leads the center-left Panhellenic Socialist Movement, he has found himself in a position similar to the right-wing Berlusconi’s in recent days. Hastening to meet targets to guarantee the next €8 billion tranche of emergency loans from the EU–European Central Bank–IMF troika, George Papandreou’s now defunct government has faced massive opposition. ...

Yet despite its opposition to Papandreou’s austerity measures, the center-right opposition has not propounded an alternative. While the refusal of Antonis Samaris, leader of the center-right New Democracy, to join a coalition government headed by the former prime minister was ultimately responsible for Papandreou’s downfall, Papandreou was only able to withdraw his proposal for a referendum because New Democracy agreed to support his austerity measures in parliament. New Democracy is on the verge of joining a new national unity government and will exert a decisive influence on policy formation within days. There is, however, no clear sense of what—if anything—its participation in government will change.

Outgoing Prime Minister José Luis Rodríguez Zapatero’s strategy of imposing a constitutional cap on the state budget, making sweeping cuts to the public sector, eliminating corruption, and rationalizing the banking sector has been widely questioned. Throughout the summer the "Indignados" occupying public squares in Spain grew in strength and scope. Their huge demonstrations of early August were repeated on October 15, with more than 50,000 protestors massed in Madrid and upward of 250,000 in Barcelona.

Yet while Mariano Rajoy Brey—leader of the People’s Party—commands a solid lead in opinion polls, his popularity is based mostly on the unpopularity of Zapatero’s government. Committing to EU-agreed targets, Rajoy has announced that he will follow Zapatero’s plan of cutting the budget deficit to 4.4 percent of GDP this year. At the regional level, PP-led governments have already been pursuing an aggressive policy of cutting public-sector jobs, and there is no indication that this will cease should Rajoy be elected. The few novel ideas which Rajoy has suggested—including modest tax cuts for small business and subsidies for new employers—are conditional on economic recovery and thus unlikely ever to be implemented. [my emphasis]