Prime Minister Silvio Berlusconi
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Italian president tries to calm markets as borrowing costs soar

Italy's cost of borrowing has touched a new record, a day after Prime Minister Silvio Berlusconi said he would resign once budget reforms were passed.

Italy's borrowing costs have now passed 7%, a rate seen as unsustainable.

Investors fear that Italy could become the next victim of the debt crisis.

In a bid to calm markets, President Giorgio Napolitano said reforms would be passed and Mr Berlusconi would resign "within a few days".

Gavin Hewitt reports.

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