With Silvio Berlusconi officially submitting his resignation this weekend, the Mario Monti era begins in Italy. The interim prime minister's first task will be to form a new government to enforce the country's recently approved austerity package to get the country's debt burden under control. But who is Italy's new leader? And will his new government be enough to prevent a further crisis in the euro zone?

As the European sovereign debt crisis has spread from Greece to Italy, investors worst fears are coming true. "Contagion" is the word of the day, as Italy's precarious situation threatens to destabilize the entire euro zone, possibly posing a systemic risk to the global economy. A central member of the euro zone, and Europe's third largest economy, Italy is too large to be bailed out by Europe as was the case with Greece. Italian bond rates have skyrocketed to above 7 percent, as investor fret over whether Italy's government will be capable of dealing with the crisis, even with the departure of Prime Minister Silvio Berlusconi.

Embattled Greek Prime Minister George Papandreou will resign once plans for a new coalition government are finalized. Papandreou and his political rival, conservative leader Antonis Samaras, reached a deal on Sunday to form a unity government to implement the unpopular austerity measures required by a bailout deal reached with European leaders. The new government is expected to be led by a non-politician who will be named on Monday.

Greece's ongoing debt crisis and governmental instability has become the focal point of this week's G-20 summit in Cannes, France. A day before a scheduled no-confidence vote in Greek Parliament that could lead to the government's collapse, two ministers have publicly split with Prime Minister George Papandreo over his plan to hold a referendum on a European bailout plan. Finance Minister Evangelos Venizelos and three other ministers are now opposing the referendum, saying Greece's membership in the euro cannot be jeopardized.

Federal regulators say hundreds of millions of dollars of customer money is missing from MF Global, the brokerage firm which filed for bankruptcy on Monday. It is unclear where the estimated $700 million has gone, and no one has yet been accused of wrongdoing. Headed by former New Jersey governor Jon Corzine, MF Global made risky bets on the European debt crisis. The Dow dropped 276 points in reaction to the news of the implosion, reminiscent of the Lehman Brothers collapse in 2008.

Greek Prime Minister George Papandreou announced late Monday that he is calling for a nationwide vote on a European bailout plan. Markets are tumbling this morning on news that the Greek people will have the final say on an economic package agreed to last week by European leaders after months of negotiations. Rachel Donadio, Rome bureau chief for The New York Times, reports on the latest.

Greece is preparing this morning to vote on drastic austerity measures that have sparked nationwide strikes and rioting in the country's capital, Athens. 5,000 police were deployed to Athens over the past two days, to combat protesters with tear gas. Meanwhile, the climate inside Parliament is calm as they prepare to vote. If the austerity measures pass, Greece will be able to obtain a second bail-out from the European Union, and avoid defaulting. 

According to a report in The Guardian, Italy's prime minister, Silvio Berlusconi has been dealing with Libya on a major scale. He was licensed to do $156 million in business with the country, mostly dealing in with military aircraft. This may seem surprising now that Europe is trying to stop Col. Gadhafi, but the two countries have a long and tangled relationships. Libya is a former Italian colony and the two countries still have very close ties. Rachel Donadio, Rome bureau chief for The New York Times looks back at the relationship between the two countries.

An Italian judge indicted Prime Minister Silvio Berlusconi on charges that he paid for sex with a 17-year-old girl. He has been ordered to stand trial in April. The prime minister has denied any wrongdoing and is fighting back against charges in the media. Despite the scandal, Berlusconi has refused to step down. The New York Times' Rachel Donadio reports from Rome.

Talking to reporters Tuesday, Pope Benedict XVI had strong words about the abuse scandals that have plagued the church, saying, “sins inside the church” threatened Catholicism, and that “forgiveness does not substitute justice.” The notion that penance is different from justice is significant as the church sees a clash between those who want to protect priests those who are fighting for more transparency.

The New York Times reported this week that top Vatican officials, including the future Pope, did not defrock an American priest who had sexually abused as many as 200 boys at a Milwaukee school for the deaf. Arthur Budzinski is one of the deaf victims named in the abuse case and he tells us how the experience changed his life. We also hear from his daughter, Gigi, who interprets on the air.

Hundreds of sexual abuse cases against Catholic priests have been surfacing in Ireland over the past weeks and the Pope said he will address the crisis in a repentance letter tomorrow.

But his efforts could be undermined by a scandal of his own. Last week, a senior church official said when the Pope was Archdiocese of Munich, he made “serious mistakes” in handling one specific priest accused of molesting boys back in the early 1980s.

 

Just after 3:30 this morning local time, central Italy was rocked by an earthquake measuring at least 5.8 on the Richter scale – though the U.S. Geological Survey measured it at 6.3. It's a significant tremor by any measure. At least 50 people have died, and tens of thousands of people are homeless. For more, we go to Rachel Donadio. She's the Rome bureau chief for our partners The New York Times, but right now she's walking the streets of L'Aquila, Italy, which is near the center of the quake and 60 miles northeast of Rome.