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Greece is off the table for now as Papandreou is said to resing later today (or will he?). However, the focus is now Italy, not exactly in much better shape.
European shares are falling Monday, despite initial expectations of a positive start, as investors' attention shifted from Greece to Italy with fears about the stability of the Italian government and its ability to deal with their debt crisis.
The political unease in Italy and fears about the way country is dealing with their problems led the yield on 10-year bond and the cost to secure the debt against default of the Italian government to reach record levels today.
The Italian lower house of parliament will vote tomorrow on the budget measures. If measures are not adopted, Berlusconi will be submitted to another vote of confidence. Forex.com: "And this time it may well be out of luck ... Italy may well take the path of Greece, namely the formation of a unity government,"
Fears over Italy were exacerbated by comments made by the member of the European Central Bank (ECB) Yves Mersch. In an interview with Italian newspaper La Stampa, Mersch said the bank decided not to buy the Italian debt if the government does not provide sufficient evidence that will keep the plans for reform and restructuring.
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