Italy’s senate passed an austerity program designed to prevent the third largest economy in the Eurozone from needing a massive bailout to pay its debts.

The vote tally was 156 to 12 in favor of approving the austerity measures. However, opposition lawmakers largely abstained from voting.

In response, the FTSE MIB Index of Milan is up about 1.5 percent.

The bill is expected to be approved by the lower house, the chamber of deputies, in a special session over the weekend, then it'll move on to the office of Prime Minister Silvio Berlusconi, who has promised to resign thereafter. It's believed that an interim government led by Mario Monti, a former European Union (EU) commissioner will be formed, with the supervision of president Giorgio Napolitano.

Under terms of the austerity bill, which includes a series of spending reductions, a freeze on state workers' salaries, an increase in the retirement age and tax hikes, the government expects to save 59.8 billion euros ($81.5 billion) and balance the budget by 2014.

“It’s clear that only a comprehensive and wide-ranging package of reforms can kick-start Italian growth again,” EU Economic and Monetary Affairs Commissioner, Olli Rehn, said Thursday.

The first and foremost thing for Italy is to restore political stability and capacity of decision-making, and in parallel to that, as soon as possible, take firm and determined action in order to achieve fiscal targets and boost growth -enhancing structural reforms, he said.

Earlier in the week, the yield on 10-Year Italian sovereign bonds soared above seven percent, the level at which it's considered unsustainable.

On Thursday, Rome raised five billion euros ($6.8 billion) from new government bonds at an interest rate of about 6.09 percent--still uncomfortably high.

Moreover, Rome is burdened with 1.9 trillion euros ($2.6 trillion) of public debt, amounting to 120 percent of GDP.

Further complicating matters is Italy’s weak economic growth, expected to rise by less than one percent this year and next.

Indeed, there's great skepticism--both inside Italy and outside--that the austerity measures will actually be implemented.

Rome BBC correspondent Alan Johnston commented, “Everyone agrees the economy needs to be reformed, but the big question is how. If there is to be austerity, who should feel the pain most?

In the street, they would tell you it needs to be the rich: the financiers, the bankers, the tax-evaders. On the other side of the debate, there are people who would say the public sector workers have had it too easy for too long -- that employers must be allowed to hire and fire people more easily if business is to be given a freer hand.”