Ex-EU commissioner, Mario Monti, has become the new Italian Prime Minister following the resignation of PM Silvio Berlusconi. One of the first tasks carried out under the PM was the sale of £2.6bn of new five-year bonds. However, the rate of 6.29%, a new eurozone record, was a clear indicator of the continued unease in the markets.

All eyes are now on Italy to see if Mario Monti can form a new government and bring stability in what is a very difficult time. So far Mr Monti has set no timetable for the formation of the new government or given any indication of who he plans to nominate as ministers. It's expected that he will consult all the political parties together with unions and industrial groups with the intention of announcing the new line-up later this week.

Mr Monti says Italy, "must again be,  and must increasingly be, an element of strength, not weakness, in a  European Union that we helped found and in which we should be  protagonists".

The Italian austerity measures include 59.8bn euros in savings that  will, hopefully, balance the budget by 2014. Italians face, for example, an increase  in VAT from 20% to 21% and a freeze on public-sector salaries until  2014.