The resignation of Berlusconi did not assuage the financial markets

• The government in Rome sold bonds at a record yield

• Mario Monti is getting its Cabinet ready

Yesterday, Italy sold five-year bonds and successfully raised 3 billion Euros (4 billion dollars) - the maximum amount targeted by the government, but the bonds were placed at the highest yield of the last 14 years.

The Italian treasury sold bonds at a yield of 6.29%, compared to 5.32% - at the similar auction of October 13th. Still, the yield of Italian bonds sold was below 6.35%, which is what they were trading at on the secondary market prior to the auction.

Demand for government bonds was 1.47 times higher than the offer, compared to 1.34 times - at the October auction.

Last week, the yield of Italian government bonds with a 10-year maturity exceeded 7% for the first time since the creation of the Euro. Analysts consider that the yield of about 7% is unsustainable.

It bears reminding that former European commissioner Mario Monti, aged 68, was appointed to create a new government after the resignation of Silvio Berlusconi. Mario Monti - economist and former advisor at "Goldman Sachs Group" Inc. - wants to bring confidence to the markets and says that Italy can overcome the debt crisis.

After receiving the mandate from the Italian president, Giorgio Napolitano, Monti said: "I will act for the quick exit from a situation that has urgency aspects. Italy must again be and must be increasingly an element of strength, not weakness in a European Union that we helped found and in which we should be protagonists".

The government which Mario Monti will form must win the confidence vote of the Parliament within ten days, following which it would have to submit the oath before the president of the country.

Analysts feel that Monti is currently the best alternative for leading the government in Rome.