Ian Bremmer, President of the Eurasia Group stopped by the Daily Ticker set today to give us his take on the never ending and ever escalating European debt crisis now centered on Italy.
First, here's the latest out of Italy where the focus is political: It appears Italian Prime Minister Silvio Berlusconi's days as head of the government are numbered. Berlusconi failed to get enough support in parliament today to keep his job for much longer. Now, there are reports he will resign after the country's austerity vote.
"He's lost all his political capital," says Bremmer of Berlusconi, noting he's also lost the confidence of the markets, as has been witnessed by the rising yields on short term debt.
Bremmer clearly thinks the European crisis will lead to economic hardship and recession on the other side of the Atlantic, but ultimately he's optimistic about the future of the Euro and Eurozone. As he rightly observes, very few if any important parties in Germany, or elsewhere in Europe, are looking for an exit from their monetary union.
There is no denying that all the troubles in Europe are reeking havoc on the collective market psychology. "That level of psychic distress in the markets is not limited to Europe but it does make Europe harder to fix," says Bremmer. The other underlying condition is there are several potential structural problems in the global economy outside of Europe. "The world is so agitated right now. It's not just about Europe," says Bremmer citing questions about the U.S. economy and debt, and also China's ability to bring about a "soft landing."