Is Italy Next In Line For A ‘Bailout’?
Compared to Greece, Portugal and Ireland, Italy is an economic giant.
Italy’s debt is the second largest in the euro zone, leading many to question if the country is just too big to bail out. Italy’s debt is at $2.6 trillion (€1.9 trillion)—simply too much for the European continent to cover.
Gold holdings in Italy’s central bank are worth just a tenth of what the country would require for a bailout.
Investors are dumping Italian bonds. Interest rates on 10-year bonds are now over 7 percent—an enormous rate. Markets in the U.S. and Europe are reacting negatively to Italy’s fiscal crisis.
If Italy is unable to pay its massive debt it could mean a economic repercussions for Europe and the U.S. Banks in the U.S., in particular, are more affected by Italy than other countries in the EU. Meanwhile, the EU is already warning of a region-wide recession in 2012.
It’s worth mentioning that Italy ranked dismally on the Transparency International Corruption Index, at 67. That's below Rwanda, Ghana and Tunisia.
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