As the third largest economy in Europe, Italy has attempted to respond to the crisis it is facing. The benchmark government bond yield increased again. The Italian bond market has not seen these yields since 1997 and many experts feel these yields will not be sustainable.
The debt crisis has led to political turmoil in the Italian government. It faces a backlash from some members of parliament due to its lack of action to enact reforms to mitigate the country's struggling economy and underlying debt issues.
Investors will need to give careful consideration to the current political issues in Greece as well. As a bailout fund may serve to improve confidence in the market, there remain many variables that could turn everything on its head. Euro Zone finance ministers will attempt to hasten their work to build up the bailout fund and have decisions by the end of November. With globalization linking economies around the world, investors will be carefully watching the economic indicators in Europe as well as the United States.