The markets have not been eased by Italian Prime Minister Silvio Berlusoni’s pledge to resign once the budget reform bill is passed. The yield on 10-year government bonds rose to 7 percent breaking yet another record high for the post-euro era.
The situation is closely mirroring that experienced by Greece and once investors determine that Italy is unlikely to make good on its outstanding debt, the end result is typically some form of controlled default.
Source: BBC News