Italy's bond yields at record levels today ....

[sasguru]

... looks like the markets have decided Italy is bankrupt.
There is no plan B to save Italy , because Europe's leaders thought they could contain the contagion with Greece, they're a few weeks behind reality.
Looks like the endgame has started.

[EternalOptimist]

... looks like the markets have decided Italy is bankrupt.
There is no plan B to save Italy , because Europe's leaders thought they could contain the contagion with Greece, they're a few weeks behind reality.
Looks like the endgame has started.

jesus

[TimberWolf]

Can't Berlusconi lend Italy some money?

[BlasterBates]

As usual overdone doom. Italy is not Greece. Italy has a thriving industry, it manufactures Ferrari's etc. They just need to repeat the reforms German put through a few years back, i.e. sack civil servants, reign in pay, raise the retirement age from 60, hopefully to 67. With a stiff austerity package Italy will be rebounding without any problem. Italy is actually a "non-issue". It's deficit is actually less than that of the UK, whose deficit stands at around an astounding 10%.

[sasguru]

As usual overdone doom. Italy is not Greece. Italy has a thriving industry, it manufactures Ferrari's etc. They just need to repeat the reforms German put through a few years back, i.e. sack civil servants, reign in pay, raise the retirement age from 60, hopefully to 67. With a stiff austerity package Italy will be rebounding without any problem. Italy is actually a "non-issue". It's deficit is actually less than that of the UK, whose deficit stands at around an astounding 10%.

Absolute nonsense.
Italy's debt/GDP is a whopping 120%. Their growth rates over the last 15 years show they cannot pay that back.
Italy's debt is the third largest in the world.
That's why the markets are targeting them.

HTH

[NervousRexx]

IMO the problem is the euro being a flawed concept. Look at history and the ERM. Best Greece gets out now and takes the hit for a few years...

[sasguru]

A prescient article written a few months ago, which should explain to economic illiterates like BB what the problem is:

Investors Chronicle - What's Italy's problem?

[BlasterBates]

Absolute nonsense.
Italy's debt/GDP is a whopping 120%. Their growth rates over the last 15 years show they cannot pay that back.
Italy's debt is the third largest in the world.
That's why the markets are targeting them.

HTH

You need to check the growth rates over the last 10 years. In a boom Italy can easily knock up a 3% growth rate. In 2000 it was growing at nearly 4%.

[Mich the Tester]

There's another aspect to the problem; Italy is futher down the road of the greying population than the rest of Europe. They have had such low birth rates that they can't actually grow the economy very much as there simply aren't enough people to do any more work than is being done; they're going to need immigration to keep their industry and agriculture going as well as caring for the old and infirm, but the majority don't want that. Their businesses have a tremendous potential for growth but it's stifled by a shrinking population.

They'd actually be just fine without any economic growth as the money is divided over less and less people, but because of the bond yields rising so far they're going to struggle to repay debts they've built up in the past.

[sasguru]

You need to check the growth rates over the last 10 years. In a boom Italy can easily knock up a 3% growth rate. In 2000 it was growing at nearly 4%.

You ought to reference your charts, since that is NOT Italy's growth rate as conventially measured.

This shows that, as most experts agree, Italy's growth rate rarely hit 1% over the last 15 years.

Italy GDP Growth Rate