Sunday, 10 July 2011

Why Italy really matters for the Eurozone



As the graphic reveals the CDS market for Italian debt is particularly vulnerable and as useful background the following is excerpted from an article in the FT for July 10th.

On Friday, yields on Italian government debt – the largest bond market in Europe – hit their highest levels since October 2002. Italy is now borrowing at its biggest premium over German bunds, the benchmark for the region.

The move followed the surfacing last week of tensions between Silvio Berlusconi, prime minister, and Giulio Tremonti, Italy’s finance minister, over the country’s proposed austerity programme.

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