Concerns are growing that Italy will become the next victim of the debt crisis after its borrowing costs soared to their highest level since the euro was created in 1999. The yield on Italian 10-year bonds rose to 6.73%, which is past the point that led to other eurozone countries - Greece, the Irish Republic and Portugal - requiring a bail out.

Mr Berlusconi has promised to push through another round of reforms amid growing fears that Italy is simply too big to fail. With an ecomomy that's larger than Russia and India the resources of the eurozone and IMF would be severely tested if asked to find a bailout for Italy.