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Silvio Berlusconi is to resign as Italy’s prime minister following the approval of a new budget law, the country’s president was quoted as saying on Tuesday evening.

A senior official told the Financial Times that Mr Berlusconi has proposed to resign after parliament passes the new financial stability law containing the reform measures agreed with the European Union.

News of the billionaire prime minister’s plans to stand aside came after a day that saw him lose his majority in parliament and Italian bond yields set fresh euro-era highs, intensifying questions as to whether Italy will be able to service its debts.

Following the news of Mr Berlusconi’s offer to depart the euro gained 0.4 per cent against the dollar to $1.3836. Gold fell after earlier reaching $1,800 per troy ounce for the first time since September.

Italian Prime Minister Silvio Berlusconi, the seemingly untouchable media magnate who has brushed off countless scandals and challenges to his rule, said he would resign Tuesday after losing a governing majority in Parliament. Earlier Tuesday he passed a crucial budget vote, but failed to muster a majority on the measure. Meanwhile the $2.6 trillion Italian bond market moved toward unsustainable levels, with yields on benchmark 10-years surging past 6.7%.

“If I must die, I’ll do it in the House,” said a defiant Berlusconi on Tuesday, vowing to meet his “traitors” in Parliament. Hours later, he passed the key budget measure with 308 votes, seven short of a majority, as 321 lawmakers abstained. Berlusconi’s failure to marshal a 316-vote working majority on the budget measure suggested he would fail to pass a confidence vote, leading to calls for his resignation. Italian bond yields surged, and U.S. equity markets plunged deeper into negative territory.