Papandreou: Agreement reached on interim government

Greek Prime Minister George Papandreou has said an agreement has been reached on forming an interim government in Greece.

The Prime Minister made the statement as he officially announced his resignation on Greek television.

Mr Papandreou has been locked in talks with opposition leader Antonis Samaras on who will lead an interim government that will take the country to early elections in February.

Across Europe share prices continue to fall this afternoon while Italy's borrowing costs have hit new record highs.

The bond yields are now at the same levels that pushed Ireland and Portugal into a multibillion euro bailout from the EU and IMF.

News editor for currencies at Dow Jones newswires, Katie Martin, has said that the ECB is forcing Italy to get its house in order.