While Greek Prime Minister George Papandreou narrowly survived a confidence vote on Friday, it is looking increasingly unlikely that his Italian counterpart will emerge unscathed from his own vote next week.

As worries grow over Italy’s spiraling debt and the Rome government’s half-hearted vow to tackle the crisis, Silvio Berlusconi is hanging by a thread. Rumors that he was planning to resign sent Italian equities through the roof – before he squelched such reports as untrue and “baseless.”

Earlier in Monday’s trading session, the yield on Italian 10-year sovereign bonds soared to an all-time high of 6.7 percent, suggesting the market doesn't believe Rome can reduce its deficit and that it may require a bailout.

Italy, whose tepid economy is expected to climb by less than one percent this year and next, is burdened by 1.9 trillion euros in debt – or 120 percent of GDP, the second such highest level in the Eurozone.

Meanwhile, more loyalists are jumping from Berlusconi’s sinking ship and many have resigned, ahead of a key parliamentary vote.

“Italy’s ability to gain market confidence will be determined by whether it will implement sound structural reforms within a realistic timeline,” Vladimir Pillonca, an economist at Societe Generale SA in London, told Bloomberg.

“Market confidence is extremely hard to restore once lost” and “until then, Italy will remain Europe’s epicenter of systemic risk.”

Of immediate concern, Rome will vote Tuesday whether or not to approve last year’s budget report – this would normally be a routine rubber-stamp measure, however, given the new climate of urgency and crisis, is it viewed as an early test of the Prime Minister support.

Brian Barry, strategist at Evolution Securities, told Reuters: If [Berlusconi] goes it might prove to be important in terms of confidence as the Italian government has lost credibility over the past few months. Hopefully we would then get some clarification on a new government and more spending cuts because at the moment it doesn't look too encouraging with Italian yields where they are.

“I fear we no longer have a majority in parliament,” Interior Minister Roberto Maroni said on a talk show Sunday.

Maroni, a member of the Northern League party which forms part of Berlusconi’s ruling center-right coalition, said he support holding snap elections.

“Berlusconi may still be in office, but he has not been in power for some time,” Nicholas Spiro, managing director at Spiro Sovereign Strategy in London told Bloomberg.

After 17 years in office, the 75-year old Berlusconi, who has served as Italy’s leader three separate times, may indeed be facing the end.

Bloomberg reports that if Berlusconi loses the confidence votes, President Giorgio Napolitano would likely confer with political parties to try to build a new coalition government. Should such a measure fail, a new election would be held in a few months.