Debt Burden Weighs Down Economies Of Greece, Italy

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Political leaders in Greece remain locked in negotiations over a new unity government. George Papandreou is stepping down as prime minister but his replacement has not yet been named. In Italy, Prime Minister Silvio Berlusconi is struggling for his political survival. He faces a crucial budget vote in parliament Tuesday.


This is MORNING EDITION from NPR News. I'm Renee Montagne.

We're going to get an update now on the struggling economies now threatening the Eurozone. Let's start with Greece, which is still trying to put together a unity government after its embattled prime minister agreed to step down. So far, George Papandreou is still there and Greek lawmakers have not been able to agree on a replacement.

The interim government, when it finally comes together, has one main job, And that's to secure a vital European bailout package and to prevent Greece from going bankrupt. That bailout package involves deep spending cuts, which, not surprisingly, are hugely unpopular with most Greeks.

In Italy, Prime Minister Silvio Berlusconi is fighting for his political survival. He's under increasing pressure to resign amid uncertainty about Italy's ability to cut its massive public debt. Italian bond yields has risen to an all-time high, in part because of Berlusconi's failure to act quickly on reforms to deal with the debt crisis.

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