· Berlusconi’s promise to resign did little to assuage fears in Italy’s bond market, the third largest in the world.

· Panic began on Nov 9th, 2011 when LCH Clearnet raised its margin calls, thereby raising the cost of dealing in that market.

· A debt crisis in Italy seems inevitable:

o Borrowing costs will remain high.

o The finance industry will not reverse its extra margin calls.

o Rating agencies are sure to downgrade the country.

· The Economist argues that, to ensure that Italy stays solvent, the ECB should buy Italian debt in unlimited quantities and protect European banks.

· Merkel and Sarkozy have acknowledged the possibility of leaving Greece to its own fate, against their prior insistence that the Euro should remain intact. Could a new “Euro club” be created?

· Italy may have a future: