Italy now the biggest threat to eurozone

ITALY overtook Greece as the prime threat to the stability of the eurozone on Monday as governments sought to placate frantic bond markets and halt accelerating financial contagion.

Italian government bond yields rose to their highest since 1997 — approaching levels regarded as unsustainable — as political turmoil in Rome threatened to drag the eurozone’s third largest economy deeper into the region’s debt crisis.

Greece’s outgoing socialist prime minister and conservative opposition leader rushed to put in place an interim national unity government for just long enough to save the country from imminent default by implementing a new bailout programme.