BBC News with Neil Nunes

The Italian President Giorgio Napolitano has tried to reassure the world's financial markets that his country will be able to pay its massive debts. The financial crisis in Italy, one of the world's largest economies, has deepened with the key interest rate on government bonds rising to 7%. That's the point at which several much smaller eurozone countries had to ask for international bailouts. President Napolitano called for the country to find a renewed sense of responsibility and

cohesion

.

"We must act in order to depart urgently today from a very dangerous

squeeze

on the titles of our state debt on the financial markets and on the conditions of our banks."

The president said Italy would pass a new financial stability law within days and the Prime Minister Silvio Berlusconi would then fulfil his promise to resign.

Politicians in Greece have failed to reach an agreement on a new prime minister after three days of intense

wrangling

. From Athens, here's Mark Lowen.

This is yet another twist in the extraordinary political drama unfolding in Greece over the past few days. A meeting between the prime minister, president and other political parties intended to name the country's next leader has broken up, and another round of talks called for Thursday morning. Earlier, George Papandreou gave a farewell television address, announcing that the new government would implement Greece's bailout package so as to receive its international loan, and he said Greece would do all it can to stay in the eurozone. But behind the scenes, the wrangling goes on, leaving a