Technocrat leaders in Italy and Greece rushing to form governments will face a critical test of their ability to limit the damage from the euro zone debt crisis when financial markets open on Monday, Reuters reported. Italy's president asked former European Commissioner Mario Monti on Sunday to form a government to restore market confidence in an economy whose debt burden is too big for the euro bloc to bail out.

Italy spends almost a third of its annual budget on pensions and as a ratio of gross domestic product (GDP), the spending is the highest in the world. Not even 37% of the 55-64 age cohort are gainfully employed, Finfacts reported. If Ireland extended the same pension benefits that are available to its politicians and the rest of the public service, to the rest of the citizenry, the costs would be similar to Italy's. Ireland's annual pension costs of €7.5bn amount to over 15% of total annual revenues and 5% of GDP.

Prime Minister Silvio Berlusconi’s pledge to resign failed to quell a growing investor panic Wednesday over indebted Italy’s ability to pass austerity measures and pay its bills, sending the nation’s borrowing rate soaring to levels that could force the world’s eighth-largest economy to seek international help, The Washington Post reported. The negativity spread to global markets, as Italian borrowing rates surged above 7 percent and stock markets in Milan, Paris, Frankfurt and New York dropped markedly.

Debt-choked Italian directory group Seat Pagine Gialle said it was confident that a debt restructuring accord could be reached that would allow it to continue operating, as it reported a 17.7 percent fall in nine-month core earnings, Reuters reported. Seat, which is in the process of restructuring its 2.7 billion euro debt, said nine-month revenues fell 10.5 percent to 695.6 million euros from a restated 2010 figure. Operating free-cash flow stood at 290.7 million euros it said and earnings before interest, tax, depreciation and amortisation (EBITDA) totalled 273 million euros.

Italian Prime Minister Silvio Berlusconi pledged to step down after Parliament approves austerity measures, as the euro-zone's third-largest economy tried to stave off the nightmare scenario of a bailout that would test the currency union, The Wall Street Journal reported. The promise to resign, which came after Mr.

Prime Minister Silvio Berlusconi defied huge pressure to resign on Monday, desperately playing his last cards to save his crumbling government as fears over Italy's instability hit markets across Europe, Reuters reported. Berlusconi denied reports by journalists close to him that he would resign within hours, immediately reversing a brief recovery in stock and government bond markets battered by political uncertainty in the euro zone's third economy.

Italian directories publisher Seat Pagine Gialle SpA is at the center of a dispute with its stakeholders that may see the company put into insolvency if an agreement isn't reached by the end of the month, said market participants Wednesday, Dow Jones Daily Bankruptcy Review reported. Seat PG, with total debt of EUR2.7 billion, stated last week that it wouldn't pay a EUR52 million coupon due on Oct. 31 on its EUR1.3 billion subordinated bond via a special purpose funding vehicle called Lighthouse.

Top European Central Bank officials offered a skeptical appraisal of Europe's latest plan to solve its debt crisis, suggesting that the central bank may be forced to maintain the emergency measures it has adopted to keep the problems from spreading, The Wall Street Journal reported.

As the continent's policy makers continue to grapple with the unfolding crisis that began with debt problems in Greece, investors' focus has turned to Italy, the euro-zone's third largest economy, and a nation saddled with one of its heaviest debt burdens, The Wall Street Journal reported. Worries that the government won't be able to keep up payments on its debt have driven up the yields on Italy's sovereign bonds, which is pressuring the Italian banks that own them. The world's oldest bank, Siena-based Banca Monte dei Paschi di Siena SpA, is now caught in the storm.

Moody's lowered its rating on Italy's bonds by three notches on Tuesday, saying it saw a "material increase" in funding risks for euro zone countries with high levels of debt and warning that further downgrades were possible, Reuters reported. The agency downgraded Italy to A2 from Aa2, a lower rating than it holds on Estonia and on a par with Malta and kept a negative outlook on the rating.