The center of Europe’s debt crisis was rapidly shifting Monday from tiny Greece to far-bigger Italy, threatening to open a dangerous new chapter in the region’s financial turmoil and plunging embattled Prime Minister Silvio Berlusconi into the deepest political crisis of his two-decade career.
Investors staged a fresh run on Italian bonds that drove borrowing costs for the world’s eighth-largest economy above 6.5 percent, brushing up against levels that, once crossed by Greece, Portugal and Ireland, led to a quick erosion of confidence that triggered international bailouts.
The escalating turmoil in Italy highlights the repeated failures of European leaders to come to grips with the debt crisis, which has been building over the past two years.
Officials had hoped that the markets would calm after politicians in near-bankrupt Greece rallied around a plan last week that would bring sharp austerity in exchange for a bailout. But investors, now fretting over Italy and doubting whether European leaders can muster the will to truly resolve the crisis, instead appear as skeptical as ever that highly indebted European countries will be able to pay their bills.
via Europe debt crisis shifting from Greece to Italy.
