Beyond Greece, Europe fears financial contagion in Italy and Spain
"To see those yields on highly developed countries like Italy jump so fast has really focused minds," said Simon Tilford, chief economist for the Centre for European Reform in London. "Merkel is now in a very difficult position The Germans are now alive to the risk in ways they weren't before. For all the derision about Silvio Berlusconi, Italy is core Europe and has very strong ties to Germany and France."