The euro region's defenses are being breached.

Investors yesterday propelled Italy's 10-year bond yield toclose at a euro-era high of 7.25 percent after the promised exit ofPrime Minister Silvio Berlusconi failed to convince them that hiscountry can slash Europe's second-largest debt burden.

The biggest signal yet that the single currency's third-largesteconomy is falling prey to its two-year debt crisis forces GermanChancellor Angela Merkel, European Central Bank President MarioDraghi and their peers to decide just how far they're willing to goto defend the euro.

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