Italy at heart of crisis as borrowing costs climb (Reuters)

ROME — The front-runner to become Italy’s next prime minister warned Friday of a Greek-style social and economic meltdown unless austerity measures were maintained. Final rallies in Rome, Naples and Florence ahead of Sunday’s general election brought a flurry of last-minute appeals to a deeply-disillusioned nation. Polls suggest as many five million Italians have not made up their minds which party to support in the election, which will be held over two days in a country hit by a series of corporate and political scandals.

MILAN, Italy — The Moroccan woman at the centre of ex-Premier Silvio Berlusconi’s sex-for-hire trial has denounced what she says is psychological warfare being waged against her by Italian prosecutors. Karima el-Mahroug, the woman also known as Ruby Heart-Stealer who’s at the center of Silvio Berlusconi’s underage-prostitution trial, said she never had sex with the former Italian prime minister.

Italy's Prime Minister Silvio Berlusconi's days are numbered. He will likely be gone in a week. When it happens it will be a case of 2 down with Merkozy (France and Germany), Spain, and Portugal (thus 4) to go.

In yet another attempt to pressure prime minister Silvio Berlusconi into promised reforms ECB debates ending Italy bond buys.The European Central Bank often discusses the possibility ending the purchase of Italian government bonds if it concludes Italy is not adopting promised reforms, ECB Governing Council Member Yves Mersch said.

Italian leftist Enrico Letta was set to be nominated to be the new prime minister on Wednesday, bringing to an end a two-month deadlock on forming a new government with the launch of a coalition between right, centre and left. President Giorgio Napolitano, who was re-elected to a second term just last week after an agreement between the main parties, summoned Letta to the presidential palace for the expected nomination. Letta was seen arriving for the meeting.

On June 1, former Italian Prime Minister Silvio Berlusconi said "Italy should dump the euro unless the European Central Bank agreed to inject more cash into the economy". One day later Berlusconi said the idea Italy should dump euro was a "joke".

The Italian general election will be held next week. Currently, the lead is held by Pier Luigi Bersani, head of Italy's left democratic party.

The G-20 summit is over. As expected, the two-day summit produced nothing but bickering. On day one, European Commission president Jose Barroso kicked things off by sniping at a Canadian reporter and blaming the US for Europe's problems. UK Independent Party (UKIP) leader Nigel Farage responded by calling Barroso a "delusional idiot".