With markets tumbling around the globe, Italy's president promised emphatically that Silvio Berlusconi will step down soon as premier and lavished honors on a leading economist, who instantly became Berlusconi's presumed successor.

Across the Ionian Sea, the debt crisis in Greece deepened on Wednesday with the breakdown of talks aimed at creating a power-sharing government to prevent the country from slipping into bankruptcy. The collapse came just minutes after the prime minister delivered a farewell speech to the nation.

The chaos reverberated around the world, and investors pulled money out of Europe. The Dow Jones industrial average plunged more than 3 percent, the euro slipped 2 percent against the dollar, and Italy's key borrowing rate spiked at a dizzying high of 7.4 percent.