O elefante no quarto da Eurozona

Italy, with its sclerotic economy that has come with a price tag of debt levels worth 120 per cent of its GDP, has long been the elephant in the room at eurocrisis talks. But the possibility of Italy bringing down the euro if it doesn’t sort out its problems is very real and economists have consistently warned of the dangers. 

The maths is a no-brainer: so far, countries have needed bailouts of roughly 40 per cent of GDP (such as Ireland and Portugal  – the exception is Greece, which has now had two bailouts worth more than 100 per cent of its GDP). For Italy, a bailout worth 40 per cent of its GDP would be over 670 billion euros

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