(Bloomburg) Italy swept into the spotlight as the next potential victim of the European debt crisis, with world leaders calling for closer monitoring of Prime Minister Silvio Berlusconi’s deficit-cutting strategy.
Group of 20 leaders are considering International Monetary Fund inspections of Italy, saddled with Europe’s second-largest debt burden, officials said as a G-20 summit in Cannes, France entered a final day. Italy last week bowed to tighter European Union monitoring.
The embattled Berlusconi has yet to convince doubters that the austerity plan announced in August will deliver the savings needed to balance Italy’s budget by 2013, the officials said. Italy’s 10-year bond yields touched euro-era highs yesterday.
“The question is not what’s in the package but implementing it,” French President Nicolas Sarkozy told reporters late yesterday.
Italy has not agreed to any IMF monitoring, an Italian government official, who asked not to be named in line with policy, told reporters in Cannes.
Does this mean that Italian and most likely French Debt will be downgraded by S&P and Moody's, this is so confusing!!
They default and go back to the Lira and then all the banks that hold Euro denominated Italian paper fail (unless their home countries bail them out). This is a very likely event..the socialist pigs in these countries will never agree to austerity measures that reduce the cradle to grave welfare state and force a bunch of people to get off their butts and work longer hours without state funded vacations and unions that are part of the government. Never gonna happen. You will see the drachma eventually return (maybe not this year) and then you will be able to vacation to Greece fairly cheaply becuase the drachma will be worthless.
As an aside, this is going to happen here to. Eventually. That is is why when considering an investment in BB&T, make sure you realize that the prcie CAN go to $0.