Italy set to adopt EU reforms within days

The Italian President has announced that his country will adopt economic reforms promised to the EU "within days" and Prime Minister Silvio Berlusconi will then resign.

Giorgio Napolitano made the announcement as Italian borrowing costs today soared to the levels that pushed Ireland and Portugal into a multibillion euro bailout from the EU and IMF.

The yield on 10-year government bonds has reached more than 7% - the highest since the euro was founded in 1999.

Analysts fear this could make it impossible for Rome to keep financing its €1.9trn debt as Europe warned Italy needed "extra measures" to meet its targets.

Katie Martin, news editor for currencies at Dow Jones Newswires, has said it is going to become impossible for Italy to raise money on the markets.

Ms Martin said: "It's got an auction coming up - I believe tomorrow - so there'll be a lot of eyes on that, but really what has happened is the yield on the 10-year bonds has gone through 7%.

"I know to a lot of people that doesn't mean much, but basically that is very much seems as the line in the sand.

"Once it costs governments more than 7% to borrow on a 10-year basis, that is seen as the point of no return."