STEVE INSKEEEP, HOST:
So the markets forced Berlusconi to say he will resign. But today, financial markets seem less eager than ever to loan money to Italy at affordable rates. Italy continues issuing 10-year bonds, borrowing. And the cost of borrowing has gone up again. This morning, the effective interest rate that Italy has to pay rose to more than seven percent. That is widely seen as a tipping point.
When Portugal, Ireland and Greece saw the same borrowing rate, those countries had to ask their European partners for a bailout.
RENEE MONTAGNE, HOST:
Greece is still struggling to form a temporary coalition government and the stakes could not be higher. Its economy is in shambles, with default a real possibility, something that could ripple through Europe's struggling economy. The problem is, lawmakers in Greece can't agree on who should lead that government.
Joanne Kakissis is following developments from Athens.
JOANNA KAKISSIS, BYLINE: Good morning
MONTAGNE: Now, when we last spoke, and that was just a couple of days ago, it looked like this was all settled. There was a favorite to be the new prime minister and - seemed like it would all happened within hours. Why is there no new prime minister yet?
KAKISSIS: Well, the man that everybody thought it would be prime minister - he's an economist and a former vice president of the European Central Bank, that's Lucas Papademos. And right now, his candidacy is all up in the air because of political bickering.
MONTAGNE: And so, if he has fallen out of favor, in a sense, who else is being mentioned?
KAKISSIS: Well, the latest frontrunner is actually a judge, and he's the president of the European Court of Justice. His name is Vassilios Skouris. It's anybody's guess whether he's going to be selected or not. That's just the name that's been appearing this morning in the Greek press.
Another person that's been mentioned is Apostolos Kaklamani. He is a former president of the parliament and he's sort of a beloved grandfatherly figure in Greece, but he's not as serious of a candidate as the judge, the European Court of Justice president.
MONTAGNE: What is at stake here, in the sense that what is this new prime minister supposed to do?
KAKISSIS: I mean, quite simply he's supposed to save the country from defaulting. You know, he's supposed to implement the bailout agreement. And I say he, because no women have been mentioned, you know, by the way, all men. The fighting among politicians is now endangering the latest installment of the bailout. And, you know, if Greece doesn't get that money, it's about $11 billion, if Greece doesn't get that money it's not going to be able to pay its bills in December, and it's going to default and then all the chaos will begin.
So the government and the prime minister has a very focused and specific goal to do, but the coalition government and the interim prime minister have to cut through all the partisan bickering that's keeping that behind.
MONTAGNE: And what at this stage of the game are Greeks saying about this? I mean it's quite a mess.
KAKISSIS: Yeah, well, you know, everybody is very, very frustrated. One commentator called it playground politics and said, you know, politicians should all be locked in a room until they come up with an agreement. Another said it shows just how bankrupt, not Greece is, but the politics are, as well. I mean the politicians are - have - the commentators say the politicians are so self serving that they've forgotten that their goal is to actually save the country.
On the ground, Greeks are saying, you know, what's going to happen, what's going to be next, and some of them are trying to be funny about it, and, you know, one satirical radio â or one satirical television program said, hey, how about Chuck Norris as prime minister? Somebody's got to go in there and do some fighting.
But the Greeks themselves are just like, we don't know what we're going to wake up to the next day. It could be more deadlock, or it could be bankruptcy, it could be â we don't know. It's very, very frustrating and it's this sense of insecurity is really worrying Greeks.
MONTAGNE: Well, it also would seem to be worrying the rest of Europe, looking at how this is not unfolding very neatly there in Greece.
KAKISSIS: Yeah, I mean the Europeans are clearly very frustrated with the Greeks not being able to come up with a coalition government and a name for prime minister. And what's been very clear from the Europeans is they want Greece to commit to a program. They don't want people to say we're going to do this and then they want to back away because it's politically - the political cost is too hard and it's too high, and we can't do it. They want people to say we have to do these things in this agreement, otherwise there are going to be very serious repercussions.
MONTAGNE: Joanna Kakissis joined us from Athens. Thank you very much.
KAKISSIS: Thank you.
(SOUNDBITE OF MUSIC)
MONTAGNE: You're listening to MORNING EDITION from NPR News.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.