Italy crisis continues

Italy’s President is trying to calm markets as the country’s benchmark bond yields jumped above 7.5 percent.

President Giorgio Napolitano gave assurances that Prime Minister Silvio Berlusconi
would honour his pledge to step down after parliament approved reforms geared to placate markets. He would then waste no time in either appointing a new government or calling new elections.

Napolitano appointed former European Commissioner Mario Monti as a senator for life, a move which many interpreted as a sign he would ask Monti to try to form a government of technocrats as soon as Berlusconi goes.

The European Commission has called on Italy to adopt more steps to ensure that its promise to balanced its budget by 2013 will be achieved.

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