Italy | featured news

Monday's euro-zone downgrade warning by Standard & Poor's Ratings Services is a muscular move by a firm that was pilloried for its supposed laxity in the financial crisis. S&P put the long-term sovereign-debt ratings of 15 euro-zone nations, including struggling Italy and Spain, on negative watch. That typically means there is at least a 50% chance of a downgrade within 90 days, but the firm said Monday that it expected to announce any rating changes "as soon as possible" following this week's European Union summit, where policy makers are expected to lay out plans to enforce stricter budget rules.

Italy and Spain have not asked to be rescued by the International Monetary Fund, the head of the lender said on Monday as she urged European leaders to quickly solve the region's festering debt crisis.

Economist Mario Monti formed a new Italian government without a single politician Wednesday, drawing from the ranks of bankers, diplomats and business executives to make sure Italy escapes looming financial disaster....

Italy's premier-designate Mario Monti began talks Monday to create a new government tasked with overhauling an ailing economy.

Italian Premier Silvio Berlusconi resigned today after parliament's lower chamber passed European-demanded reforms, ending a 17-year political era and setting in motion a transition aimed at bringing the country back from the brink of economic crisis.

Italy's Senate approved economic reforms intended to reverse a collapse of market confidence on Friday, kicking off a rapid transition that will end the era of Silvio Berlusconi and clear the way for an emergency government within days.

U.S. stock futures are back up near Wednesday's opening price this morning as investors continue to focus firmly on Italy. Yesterday the Dow dropped almost 400 points as Italian bond yields surged past the 7% mark that is seen as the point of no return. At a time when the country has a lot of debt to refinance, borrowing costs are seen as unsustainable.

The shock waves of Europe's debt crisis will take a toll on corporate America, particularly sellers of cars, consumer products and basic materials that generate significant revenue on the continent.

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.