European leaders must contain the debt crisis now before it inflicts even more damage on global markets, investment community leaders urge.
"It's not just Italy. The contagion is spreading. They've got to stop this," says Marc Chandler, Brown Brothers Harriman chief currency strategist, according to CNBC.
Italian Prime Minister Silvio Berlusconi has said he will resign, the latest leader to fall victim to the debt crisis.
Experts are growing increasingly worried that if debt-ridden Mediterranean countries default, the entire eurozone will unravel now that the larger Italy is teetering closer to default.
"This is getting to be a game changer, will we have a euro one day? The market is forcing that issue much faster than any time in the past. It was one thing when it was about Greece. If you let Italy go off the cliff, you're questioning why do you have a euro in the first place," says Nomura Americas Treasury strategist George Goncalves.
"You cannot allow the Italian bond market, the third largest market, the biggest in Europe, to trade like a high-yield market."
The European Union's economic watchdog, the European Commission, is now worried the continent is headed to recession.
Officials have shaved 2012 growth forecasts to 0.5 percent from a 1.8 percent prediction made last spring.
"This forecast is in fact the last wake-up call," says EU Monetary Affairs chief Olli Rehn, according to the Associated Press.
"Growth has stalled in Europe, and there is a risk of a new recession."
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