Europe warns debt crisis dragging it towards recession

ROME: Italian lawmakers begin Friday to vote on a series of austerity measures designed to fend off bankruptcy as Europe's worsening debt crisis threatens a new, region-wide recession.

Greece will also Friday swear in a new unity government to push through tough reforms required for a crucial EU bailout, shortly after Washington urged Europe to act urgently to restore financial stability.

As European countries took steps to address the crisis, Hong Kong stocks opened 0.95 percent higher Friday, following a rebound in US shares.

Italian senators are scheduled to meet from 0930 GMT to consider a package of reforms that include state asset sell-offs. If approved, it will likely go to the lower house of parliament for final approval Saturday or Sunday.

The Senate session is expected to be attended by former EU commissioner Mario Monti, tipped to replace Prime Minister Silvio Berlusconi who has said he will quit after approval of the measures aimed at calming investor fears.

Those jitters pushed borrowing rates to alarming levels above seven percent Wednesday, but Italian bonds were in greater demand Thursday, pushing the interest rate on Rome's 1.9-trillion euro ($2.6 trillion) debt down to 6.9 percent. (AFP)