GENEVA, SWITZERLAND – Bond markets were nervous Monday as Greece scurried to put in place a 100-day emergency coalition government that will push through a bailout plan before money runs out. Governments in the eurozone rushed to placate the traders as Italy’s borrowing reached its highest-ever point, raising new fears about its financial stability.
Reuters reports that Lucas Papademos appears to be the front-runner to lead the coalition government, which would be in place until new elections in February. He is a former vice-chairman of the European Central Bank.
Italian Prime Minister Silvio Berlusconi is calling for a confidence vote, vigorously denying he is planning to resign. Italy’scost of borrowing reached its highest ever level Monday, with AP noting that “if the cost of borrowing rises too much, Italy might not be able to refinance its debt. Italy is the euro zone’s third-largest economy and is too big be bailed out by Europe’s financial rescue fund.”