Skip to: Content
Skip to: Site Navigation
Skip to: Search

The Reformed Broker

There's something about Italy

If this big Euro experiment is going to succeed, it is important that things in Italy stay fairly stable. The good news is, the country's banks are in relatively good shape and its leader appears competent. The bad news? A massive sovereign debt load.

By Guest blogger / June 12, 2012

Italy's Prime Minister Mario Monti adjusts his eyeglasses during a news conference in Rome on June 12, 2012. Italy's economic stability is an essential part of the eurozone's recovery plan. So far, Prime Minister Monti appears up to the task.

Max Rossi/Reuters


The thing about Italy is that it's really important to the Euro experiment that things don't get out of hand there.  It's huge economically, bigger than Spain and just behind France.

Skip to next paragraph

Joshua has been managing money for high net worth clients, charitable foundations, corporations and retirement plans for more than a decade.

Recent posts

The good news is that Italian banks, unlike Spanish ones, are in decent shape - they didn't have the same construction and real estate boom/bust as the Iberians did.  Also, the Italians can manufacture stuff - especially luxury goods - and sell them the world over without a problem, in contradistinction to Greece for example.  Also, Italy's deficit as a percentage of GDP is under the 3% allowable limit for the EZ and its new leader, Mario Monti, is strong, competent and highly respected inside his country and around the continent.

The bad news is that we're talking about one of the largest sovereign debt loads on the planet - $2 trillion or 120% debt to GDP.  The country has to sell roughly $35 billion worth of bonds each month just to keep the lights on.  Half of Italy's debt is owned by it's citizens, the other half needs foreign purchasers.  And despite the relative strength of Italian banks, the money has begun to fly north, over the Alps to Switzerland.

The risk of contagion to and from Italy is now the number one issue credit markets are focused on, especially in the wake of Spain's admission that they cannot escape without  hundred billion euros of assistance.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here.To add or view a comment on a guest blog, please go to the blogger's own site by clicking on

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer


Editors' picks

Doing Good


What happens when ordinary people decide to pay it forward? Extraordinary change...

Danny Bent poses at the starting line of the Boston Marathon in Hopkinton, Mass.

After the Boston Marathon bombings, Danny Bent took on a cross-country challenge

The athlete-adventurer co-founded a relay run called One Run for Boston that started in Los Angeles and ended at the marathon finish line to raise funds for victims.

Become a fan! Follow us! Google+ YouTube See our feeds!