The European Union has called an emergency meeting to discuss the possibility that the debt crisis could reach Italy - the Euro zone's third largest economy.

Reuters:

European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reelecting concern that the crisis could spread to Italy, the region's third largest economy.

European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.

The talks were organized after a sharp sell-off in Italian assets on Friday, which has increased fears that Italy, with the highest sovereign debt ratio relative to its economy in the euro zone after Greece, could be next to suffer in the crisis. A second international bailout of Greece will also be discussed.

The spread of the Italian 10-year government bond yield over benchmark German Bunds hit euro lifetime highs around 2.45 percentage points on Friday, raising the Italian yield to 5.28 percent, close to the 5.5-5.7 percent areas which some bankers think could start putting heavy pressure on Italy's finances.

Shares in Italy's biggest bank, Unicredit Spa, fell 7.9 percent on Friday, partly because of worries about the results of stress tests of the health of European banks that will be released on July 15. The leading Italian stock index sank 3.5 percent.

Greece was able to paper over its non-compliance with IMF strictures on its budget and get its $2 billion shot in the arm from the fund last week. It's kicking the can down the road, of course, but it has the advantage of allowing the exhausted central bankers to deal with the impending crisis in Italy.

Like jugglers trying to keep too many balls from hitting the ground, the EU is eventually going to have to come to grips with the reality that there are too many countries who need help in avoiding default. At that point, it will be every man for himself and the possibility that the Euro will collapse will come into play.

It's all speculation at this point, but you have to wonder how long they can keep all these balls in the air?