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Berlusconi Faces Vote Amid Italian Debt Concerns

Italian Prime Minister Silvio Berlusconi
Italian Prime Minister Silvio Berlusconi is facing a vote in parliament, amid doubts about his leadership and growing concerns about the risk posed by the country's massive public debt.

Berlusconi has denied fresh reports that he is considering resigning.

The denials came as the yield on 10-year government bonds in Italy rose to 6.67 percent -- the highest level in Italy since the euro currency was established in 1999.

The yield rate has risen toward 7 percent -- the level regarded as unsustainable -- as concerns have increased that the world's eighth-biggest economy might not be able to handle its 1.9 trillion euro debt and could seek an international bailout, like Greece, Ireland, and Portugal.

As yields rise, governments must pay higher interest costs, creating a cycle of debt.

Parliament was expected to vote today on Italy's finances in what was being described as a test of political support for Berlusconi's administration to implement measures to cut debt and increase economic growth.

In another development, officials said the European Central Bank was joining with the European Union and the International Monetary Fund to monitor economic reforms that Italy has pledged to implement.

compiled from agency reports