Italian cabinet in emergency session over debt cost crisis

THE Italian cabinet met in emergency session last night under huge pressure after the cost of debt rose to levels similar to those that forced Ireland and Portugal to look for a bailout.

As fears grew for indebted Italian banks, president Giorgio Napolitano issued a statement in which he came close to calling for the government’s resignation and intimating he would form a government of national unity.

The situation has reached crisis proportions, given the continuing rise in the cost of Italian bonds, which at one stage yesterday reached 6.34% for 10-year bonds, just very slightly below August’s record rate.