French, Italian leaders to discuss crisis

By the Associated Press | January 6, 2012 | 10:40 AM EST

French prime minister Francois Fillon, right, greets his Italian counterpart Mario Monti prior to their meeting at the Hotel Matignon in Paris, Friday Jan. 6, 2012 (AP Photo/Remy de la Mauviniere)

PARIS (AP) — The leaders of France and Italy will meet in Paris to discuss a spiraling debt crisis that is threatening to engulf both of their economies.

The interest rate or yield on Italy's 10-year bond rose above 7 percent again Friday — a level that has forced other countries to seek bailouts. That's worrying because Europe cannot afford to rescue Italy as it has smaller economies.

French President Nicolas Sarkozy led a European push to pressure Italy to get its finances under control that led to the creation of a technocratic government under Prime Minister Mario Monti.

But France is also struggling and faces the loss its prized AAA credit rating. Any downgrade would have far-reaching consequences since Paris' credit rating is one of the bedrocks of the continent's bailout system.