Italy at breaking point, Merkel calls for "new Europe"

Once a nation defaults, the wolf pack will find its next victim regardless of the number of emergency meetings and/or suggestions of various official super committees. Germany is the key. If the German people turn inward by withdrawing from the Euro zone, trade barriers will likely reemerge and social tension will rise. There’s far more at stake here than whether or not Greece, Italy, Spain, et. al. will be able to pay their bills. This is the message being sent by the Euro and gold.

Headline: Italy at breaking point, Merkel calls for "new Europe"

ROME/BERLIN (Reuters) - 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 economic reform.

Italian 10-year bond yields shot above the 7 percent level that is widely deemed unsustainable, reflecting investors' concerns that they may not get their money back and prompting German Chancellor Angela Merkel to issue a call to arms.

Merkel said Europe's plight was now so "unpleasant" that deep structural reforms were needed quickly, warning the rest of the world would not wait. "That will mean more Europe, not less Europe," she told a conference in Berlin.

She called for changes in EU treaties after French President Nicolas Sarkozy advocated a two-speed Europe in which euro zone countries accelerate and deepen integration while an expanding group outside the currency bloc stayed more loosely connected -- a signal that some members may have to quit the euro if the entire structure is not to crumble.

Source: finance.yahoo.com