European stocks close:

European stocks advanced, recouping this week’s losses, after the Italian Senate approved an austerity package, raising optimism that the euro area’s second- most indebted country will contain the debt crisis.

The Senate in Rome voted 156 to 12 to pass the package of measures promised to the European Union in a bid to boost growth and cut Italy’s debt of 1.9 trillion euros ($2.6 trillion), the world’s fourth biggest. Opposition lawmakers did not take part in the vote, allowing the bill to pass.

In Greece, a new unity government led by Lucas Papademos was sworn in today with a mandate to implement budget measures and decisions related to a 130 billion-euro bailout agreed on an Oct. 26. Elections may take place on Feb. 19. The new government said Evangelos Venizelos will remain the country’s finance minister and deputy prime minister.

National benchmark indexes advanced in 15 of the 18 western European markets today. France’s CAC 40 rose 2.8 percent and the U.K.’s FTSE 100 gained 1.9 percent. Germany’s DAX rose 3.2 percent, while Italy’s FTSE MIB jumped 3.7 percent.

Telecom Italia SpA gained 5.3 percent after third-quarter net income surged 33 percent to 807 million euros, beating analysts’ estimates for 708.5 million euros.

Banks and insurers paced gains. BNP Paribas surged 5.7 percent to 32.24 euros. National Bank of Greece SA gained 2.5 percent to 2.09 euros and Alpha Bank SA added 2.9 percent to 1.08 euros.

Allianz SE, Europe’s biggest insurer, rose 5.6 percent to 76.25 euros after saying it is “ready to take a closer look” at assets such as mortgages that some troubled banks may sell. The company posted a bigger-than-estimated 84 percent drop in third-quarter profit after writing down Greek government debt and investments in financial companies.

Vivendi jumped 2.6 percent to 15.87 euros after its Universal Music Group unit agreed to buy the recorded-music assets of EMI Group from Citigroup Inc. in a deal valued at 1.2 billion pounds ($1.9 billion).

Aker Solutions ASA, Norway’s biggest oil rig maker, rallied 8.5 percent to 71.50 kroner after the company signed a contract with Lundin Petroleum AB to build a 700 million kroner ($124 million) subsea production system for the Brynhild project on the Norwegian continental shelf. The contract is valued at 700 million kroner. Lundin Petroleum gained 5.5 percent to 176.20 kroner.

Galp Energia SGPS, Portugal’s largest oil company, slumped 11 percent to 13.25 euros, its biggest decline in three months, after an agreement to sell a 30 percent stake in its Brazil unit to China’s Sinopec Group for $3.54 billion.