Italian bond yields have risen above the critical seven percent mark. So where does this leave Italy and what can the rest of Europe do?

I don't think the CNBC team in Rome would mind me telling you that they're knackered. (A bit like Roman politics? - Ed). Anchor Ross Westgate and producer Vitoria Pirone have been putting in some fairly serious hours this week. They'd had to. Italy's crisis has been moving incredibly fast.  And if in the middle of the New Zealand election coverage you haven't quite absorbed this, it is a very, very big deal.

Although at the time this is posted nothing is confirmed, it is very likely that Mario Monti, a.k.a. “Super Mario,” will be Italy’s new Prime Minister. He is the kind of man who might be described as an impeccable bureaucrat. The anti-Berlusconi. He served many years on the European Commission and is a big fan of the euro.

After years of corrosive scandal, many commentators outside Italy have been amazed it’s taken this long for Silvio Berlusconi to go.  Long enough, it seems, to ruin his beautiful country. On Wednesday, Italy’s borrowing costs for its two-, five- and ten-year sovereign debt rose above seven percent. That is considered the red line for bond prices – the level above which its debt becomes unsustainable. And we know what comes after that. We know all too well, because Greece has led the way into a spiral of unsustainable debt and a bailout from Europe. It has come with painful austerity requirements attached.

Greece already has its new prime minister – they’re falling like flies these days in Europe. Lucas Papademos is a former banker and he slips, without any sign of a parliamentary vote or much less a public one, into the role. For the protestors who hit London’s streets again this week, worrying about the absence of democracy, it plays into their worst fears – the bankers and bureaucrats are taking over.

The absence of a public mandate is indeed grim and difficult to support, but then, some may argue, the plebiscite gave us Berlusconi in the first place. Silvio had no particular love for democracy.  Media domination, sure. Head scarves, "bunga bunga" parties and avoiding court have also proven popular pastimes Mr. Berlusconi.

So where does this leave Italy? And more importantly, where does it leave the euro zone?  Well, quite simply, if Italy leaves, the project is finished. Italy is the third-largest economy in the euro zone and also the world’s third-biggest sovereign bond market.

There is no way the already stretched euro zone bailout fund, the EFSF or European Financial Stability Facility, can cope.

That’s why so many have been saying this week that Italy’s problems can be solved only by Italy.

Greece may be a different matter. But it would hurt a lot. Not least of all, if Greece left and returned to its old currency, the drachma, it would still have billions in euro-denominated debt to pay back. And that would instantly become massively more expensive as its new-old currency catastrophically devalued.

We are in a real mess in Europe, no two ways about it.  There are plenty more long days coming for reporters and producers at CNBC.

The euro zone turns 13 in January next year. An unlucky number for some perhaps, but we can only hope it’s not unlucky for the shared currency itself.