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Italy’s debt load is now €2.1659 trillion, the Bank of Italy said Friday. The country’s public debt increased by €31 billion in January, bringing the total close to the record-high of €2.1677 billion euro recorded in July 2014.
Italy’s public debt is only second to Greece in the eurozone.
The main reason debt spiked in January is because the Treasury increased its available liquidity, or money supply, by €36.3 billion euro, bringing the total to €82.6 billions, Italy’s ANSA news agency reported Friday.
Now Italy has diverse economy and great industry.
But it may face difficult circumstances because of demographics.
If Italy defaulted on its debt, it would hurt its banks and domestic investors first and foremost, then foreign investors and banks. The ECB/troika/etc has nowhere close to the bargaining power that it had with Greece.
I hope but doubt that countries like USA & Italy learn from Greece. Italy would throw the world for a loop, USA or China defaulting would destroy the world's economics.
I hope but doubt that countries like USA & Italy learn from Greece. Italy would throw the world for a loop, USA or China defaulting would destroy the world's economics.
China? nearly impossible. China's external debt is 10% of GDP and its sheer forex reserve is four times its external debt.
US default is impossible either in theory. The Fed can simply print more greenback to repay whatever amount of debt it owes.
If Italy falls, the whole EU falls, therefore the whole world.
Still, Italy has a competitiveness problem as its growth (or lack of growth) is consistently lower than all major economies in the Eurozone and has been lower for quite some time now.
If Italy's economy continues to underperform, a debt crisis in the future cannot be avoided.
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