Crisis deepens as markets edge toward disaster

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http://www.elpais.com/articulo/english/Crisis/deepens/as/markets/edge/toward/disaster/elpepueng/20110805elpeng_6/Ten

Spain's prime minister, José Luis Rodríguez Zapatero, continued to work at La Moncloa palace on Friday after cancelling his summer vacation, as the global economic situation crept further toward all-out crisis.

After a week that saw $2.5 trillion wiped off the world's financial markets; the cost of borrowing for Spain reach record highs; and serious losses on the nation's benchmark index, the only vaguely positive news for the PM was that the country was no longer seen as the most likely to follow in the footsteps of Greece, Ireland and Portugal ? at least in investors' minds ? as Italy's borrowing costs surpassed Spain's on Friday for the first time since the start of the sovereign debt crisis.

Italian Prime Minister Silvio Berlusconi responded to the pressure on Friday night in a special press conference in Rome, saying that finance ministers from the G7 countries would be meeting within days to talk about how to combat the euro-zone debt crisis, the main cause of the growing crisis in the global markets.

He also announced that "Italy will accelerate reforms to achieve a balanced budget in 2013."