Eurozone Contagion - Italy next?

The contagion that the EU and IMF have been trying to head off is starting to happen, as Italian markets have been sold off and bond yields in both Italy and Spain have gone significantly higher, making it more expensive for these countries to fund their financial obligations.

The Eurozone officials are still working on the Greek debt crisis and do not need the distraction of having to cover Italy also, the third largest economy in Europe .

There would probably not be sufficient funds in the rescue fund to put something meaningful together at this time.

European equity markets tumbled yesterday and the opening's look weak today as there is a general perception that the officials at the centre of the Eurozone crisis are not being decisive enough over Greece and this has left the other members of the Eurozone vulnerable.

Investors have dumped Italian Bank shares wholesale this moring with shares prices in the major banks down from 3% to 7% just after the open and no doubt short sellers will be in there sensing blood.