First, it was the Greece threatening the economic stability of the Euro-zone and dragging down the world economy. Now, it’s Italy’s turn.

The ratings agency Fitch recently downgraded Italy’s long-term debt rating a notch to BBB, one level above the “speculative” grade, citing the country’s persistent debt and fiscal problems. Fitch says Italy has been unable to reduce its overall debt burden due to weak economic growth and a recurring failure to meet spending targets, leaving it exposed to adverse shocks.

The Italian parliament itself stands as a shameful symbol of everything that is wrong with the Italian economy. The parliament has 943 members, each of whom take home 180,000 euros ($198,000) per year (three times the average pay of politicians in other EU countries), together with rich pensions, no cost “Cadillac” health care coverage, plus every member can fly or take the trains free within Italy as often they like. Now, that’s a truly outrageous fringe benefit package that hopefully our members of Congress won’t try to import to Washington!

At 15,000 euros ($16,500) a month, members of the Italian parliament make more each month than the average Italian makes in an entire year. Talk about a privileged class of politicians!

Based on the per capita ratio of Italian legislators to citizens, there would be 2,675 members of the U.S. Congress. Now, that’s a number that tells volumes about the economic turmoil that has ripped at that country’s financial stability and threatened markets world-wide. It’s symptomatic of the financial irresponsibility of the entire country that has sent shock waves through the world’s economy.

Of course, the issues with the Italian economy run much deeper than the excesses of its legislature. The country is struggling to develop a plan that will stimulate growth and tackle the country’s 1.8 trillion euro public debt.

As in the U.S., the issue of reducing the crushing deficit without doing further damage to the ailing economy is a daunting one that has split elected officials. But, in the U.S. Congress the debate over a strategic plan going forward thus far hasn’t resulted in fisticuffs among the legislators as it has in Italy.

In Italy, government pensions are extraordinarily generous and are the focal point of the debate over the country’s deficit. Career politicians are fiercely protective of the existing pension program that is symptomatic of the country’s dire economic plight.

A few years back a brawl broke out on the floor of the Italian parliament over the issue of pension reform. Umberto Bossi, leader of the Northern League party, objected to plans to reform Italy’s generous pension system, crippling the government’s attempts to convince the EU that it is serious about embarking on serious structural reforms to kick-start the moribund economy.

Gianfranco Fini, leader of the opposition party, claimed that Mr. Bossi’s opposition to a pension overhaul was linked to the fact that his wife had retired on a generous state pension at the age of 39 from her job as a teacher. Italy’s complex and outdated pensions system allows some state employees to retire unusually early.

The remark sparked fisticuffs between MPs from the two opposing parties, with parliamentarians lunging for each other’s throats as others rushed to intervene. Parliament had to be suspended for several minutes as the fight was broken up.

This dramatic theater in the Italian parliament was emblematic of the stressful debate going on in legislatures throughout Europe and in the United States. Greece, Spain, Portugal, Ireland, Italy, and others are attempting to come to grips with the new reality of fiscal austerity, with a capital A.

To date, no other legislative body has resorted to fisticuffs over these painful, wrenching issues of fiscal restraint. To demonstrate real leadership to EU officials and the rest of the world, maybe the Italian government should consider reducing the obscene number of members of parliament and cutting their salaries and benefits.

Since that may be a non-starter, at least they might consider cutting back on the free flights and train fare as a gesture toward some sense of fiscal sanity.