Italy’s debt crisis: 10 reasons to be fearful
The European debt crisis is getting ever more serious, and attention is moving away from Greece to one of the biggest – and potentially most explosive – economies in the world: Italy
By Dominic Rushe
Guardian.co.uk
Greece and Italy were the cradles of European culture: now they are threatening to drag the European Union to the grave. While Greece’s fiscal woes were worrying, Italy’s are monumental. Even Silvio Berlusconi, one of the great political survivors of our age, hasn’t escaped this one. The Italian premier is out as the country’s debts threaten to take down stock markets around the world. Here are the top 10 reasons to be concerned:
1. Italy is the eighth largest economy in the world and the fourth largest in Europe. Its gross domestic product (GDP) was over $2tn in 2010. Greece, Europe’s other basket case, has a GDP of $305bn – an economy about the same size as Dallas, Fort Worth and Arlington in Texas.
2. The country is label-queen heaven – Ferrari, Prada, Armani etc – and a major player in utilities, telecoms and banking. But the recession has put a strain on its economy and a succession of pop-up governments have failed to tackle fundamental problems, including the massive pension debts owed its ageing population. Italy’s debts now top $2.2tn, or 120% of gross domestic product.
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