Italy's Senate voted 156-2 in favor of a new package of economic reforms demanded by the European Union on Friday.

Respected economist Mario Monti was welcomed with applause in the Senate chamber, where he was officially designated senator for life.

The move paves the way for Premier Silvio Berlusconi to resign as soon as this weekend and allow a new government to be formed.

Italy's president may ask Monti, a former European commissioner, to try to form a transitional government after Berlusconi leaves office.

European leaders are pushing Italy to prove it can handle its debt crisis and to clear up questions over its political leadership.

The reform legislation now passes to the lower Chamber of Deputies, which is expected to vote on it by Saturday.