(FT) Nouriel Roubini–Why Italy’s days in the eurozone may be numbered

With interest rates on its sovereign debt surging well above seven per cent, there is a rising risk that Italy may soon lose market access. Given that it is too-big-to-fail but also too-big-to-save, this could lead to a forced restructuring of its public debt of €1,900bn. That would partially address its “stock” problem of large and unsustainable debt but it would not resolve its “flow” problem, a large current account deficit, lack of external competitiveness and a worsening plunge in gross domestic product and economic activity.

To resolve the latter, Italy may, like other periphery countries, need to exit the monetary union and go back to a national currency, thus triggering an effective break-up of the eurozone.

Read it all (requires subscription).


Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, Foreign Relations, Italy, Politics in General, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

One comment on “(FT) Nouriel Roubini–Why Italy’s days in the eurozone may be numbered

  1. Capt. Father Warren says:

    Gee, just change 1,900bn Euros to $15Trillion, replace “Italy” with “USA” and see if the narrative of the story makes sense to you.

    Felt pretty “non-fictional” to me…………