Another day, another country on the verge of financial collapse. Investors on the New York Stock Exchange will be paying close attention to Italy this week as the European Central Bank holds an emergency telephone conference call on Sunday to fend off the financial collapse of Italy.
Speaking to the Associated Press European officials said the call was to discuss possible purchases of Italian government bonds, a move that could drive down bond interest yields which are threatening the indebted countries finances.
The fear is that the country will end up in an interest-rate death spiral, the same scenario that forced Greece, Ireland and Portugal to request bailout loans from international parties.
Officials also took some time on Sunday to voice their concern that the downgrading of the U.S. investment rating could rattle the crisis further.
In response to market pressure Italian Prime Minister Silvia Berlusconi has promised that his country is hard at work creating a budget for 2013 that will bring balance to the countries financial sheets, including an amendment to the country’s constitution which will require the government to balance the budget.
The announcement to balance the budget comes after Italy saw their bond yields go from 2 percent in 2010 to 6 percent as of Friday. Those bond yields along with a debt equivalent of 120 percent of economic input has put Italy just behind Greece as the regions worst financial crisis of the moment.
Markets around the world saw horrible decreases last week and now all eyes will be on various markets around the world, including the New York Stock Exchange as investors and world leaders attempt to come up with solutions and investments that make sense during an unstable week in finance.