Italian PM Silvio Berlusconi says he will not stand if Italy holds early elections, a day after promising to resign as soon as parliament passes urgent budget reforms. "I will resign as soon as the law is passed, and, since I believe there is no other majority possible, I see elections being held at the beginning of February and I will not be a candidate in them," he said. While Mr Berlusconi's party wants fresh elections, the opposition wants a national unity government. It is expected that Italy's parliament could approve by the end of the month a package of reforms to shore up the economy, which is badly affected by the Eurozone debt crisis. But it will only be after the budget measures are passed that the Italian president will begin consultations with the political groups on the way forward. BBC Europe editor Gavin Hewitt, in Rome, says it is clear that political difficulties lie ahead. And even if the present crisis ebbs, the fundamental problems remain - a country of anaemic growth and a debt mountain of 1.9tn euros (£1.63tn; $2.6tn), our correspondent adds. Meanwhile, an EU team is due in Rome on Wednesday to begin monitoring how Italy plans to cut its soaring debt burden. Economic Affairs Commissioner Olli Rehn said he would present the findings at the end of November, calling the situation in Italy "very worrisome". 'Subdued streets of Rome' European stocks rallied early on Wednesday, as investors cheered Mr Berlusconi's pledge to step down. Italian stocks open 1.38% higher. At 0805 GMT, the FTSEurofirst 300 index of top European shares was up 0.9% at 992.27 points, adding to a rise of 0.9% on Tuesday. News of Mr Berlusconi's resignation caused the price Italy pays to borrow on international markets to fall slightly from its record highs. Borrowing rates had shot up in recent days, raising concerns over whether Italy can service its debts. While Italy's deficit is relatively low, investors are concerned that the combination of Italy's low growth rate and huge debt burden could make it the next country to fall in the eurozone debt crisis. On Tuesday the euro rose sharply against the dollar after news of Mr Berlusconi's decision, which followed a vote in parliament on the budget in which he appeared to lose his majority. On the streets of the Italian capital, the reaction to Mr Berlusconi's announcement was subdued, our correspondent says, with many people still doubting that the flamboyant leader who has dominated Italian politics for much of the past 20 years could soon be gone. EU team eyes debt action Speaking after a meeting of EU finance ministers on Tuesday, Olli Rehn said Italy's reforms should come "the sooner the better, because time is of the essence". Mr Rehn sent what is being seen as a tough message to Italy - and Greece - warning them that politicians must unite behind tough measures to get their economies under control. He said the monitoring mission beginning work in Rome on Wednesday was "just the first step in the enhanced monitoring of Italy by the Commission". "Regular reviews will be made to track progress with implementation of the reforms," Mr Rehn said. "... It is important to strictly and fully implement what we have already at our disposal in terms of economic surveillance. This is also key to reinforce confidence among the general public and market participants," he added.