The eurozone’s cash-flow problems

The markets, it seemed, wanted Berlusconi to go. Berlusconi duly announced his resignation yesterday. And now what? The interest paid on Italian ten-year bonds has just hit 7 per cent. The eurocrisis is hastening ever onwards, with our without the departing Italian PM.

7 per cent, as you will be reminded frequently today, is the rate at which bailouts became necessary for Greece, Ireland and Portugal. It’s not certain whether it will mean the same for Italy — as Sky’s Ed Conway recently blogged, some analysts reckon they could cope with a rate of around 8 per cent — but it does suggest that investors are rapidly losing faith in the country’s creditworthiness. At the very least, there’s the prospect that another creditor will need to step in if Italy is keep up its debt payments and contain its swollen public finances.