Italy, Europe Debt Crisis | featured news

The Dow Jones industrial average was down 200 points just before midday Wednesday after Italy's borrowing costs soared, a sign that Europe's debt crisis had spilled into the third-largest economy in the euro bloc.

Italian borrowing costs reached breaking point on Wednesday after Prime Minister Silvio Berlusconi's insistence on elections instead of an interim government opened the way to prolonged instability and delays to long-promised economic reforms.

It is up to Silvio Berlusconi to keep Italy from becoming another Greece and plunging the world into an even more devastating financial crisis.

The country that seems to crop up more and more in the current eurozone discussions is Italy, but why should it be affected by the Greek crisis?

Fitch on Friday cut Spain's credit ratings by two notches, just a few minutes after downgrading Italy, saying the intensification of the euro zone debt crisis has had a negative impact in the entire region.

Moody's Investors Service on Tuesday cut Italy's bond ratings by three notches, saying it sees a "material increase" in funding conditions for euro zone countries with high levels of debt.

Italy's sovereign debt rating cut by Standard & Poor's, the latest move in a deepening and continuing European debt crisis.

Italy and Spain pass new measures as they battle to control their debts while Greece steps up its austerity plans.

Several European countries that banned short-selling have extended the prohibition until the end of September. When concerns about European banks’ exposure to Greek debt sent their stocks plummeting two weeks ago, market regulators in Belgium, France, Greece, Italy and Spain stepped in to prohibit traders from betting on the decline in a share’s price.

As markets continued to hammer Italy, Prime Minister Silvio Berlusconi rebutted calls for his resignation, saying Italy’s economic fundamentals were strong.