It was a rough day for Italy on the markets Wednesday, with investors worried that Prime Minister Silvio Berlusconi would linger in office despite his promise to step down soon. The country's borrowing rates rose to over 7.5 percent on Wednesday, a level that prompted Greece, Portugal and Ireland to seek bailouts.

Berlusconi has said he will resign as soon as the Italian parliament passes financial reforms that have been waiting in the wings for months, and Italy's president, Giorgio Napolitano, tried to reassure markets that this would happen sooner rather than later.

"Fears are totally unfounded that Italy may experience a long period of inactivity," he said on Wednesday.

Seeing is believing

There is speculation in the Italian media that Italy's reforms could come as early as this weekend.

Italy's partners in the eurozone will believe it when they see it, however, when it comes to Berlusconi's resignation and the implementation of the financial reform.

The head of the eurozone, Jean-Claude Juncker, said during a visit to Lisbon that "Italy has not only to announce but to implement measures."

Emerging candidate

Meanwhile, a leading candidate has emerged as a possible successor to Berlusconi when he steps down.

Mario Monti, the former European competition commissioner, was made a senator-for-life by Napolitano on Wednesday. It is a distinction that gives notable figures outside of politics a vote in the Senate. Monti is currently head of Bocconi University in Milan.

Napolitano said he would begin working on a new government as soon as Berlusconi steps down, with measures in place for snap elections should those talks fall through.

Author: Matt Zuvela (AP, AFP)
Editor: Nicole Goebel