Friday, November 18, 2011

Outright fear as Italy takes debt crisis to flashpoint

The departure of Italy's flamboyant Prime Minister Silvio Berlusconi is one small but important factor that has given global investors a brief moment of relief.

But in the leadup to the appointment of a new government lead by Mario Monti -a highly regarded former European Commissioner - there was outright fear that Italy's economy would implode under the pressure of borrowing costs in excess of seven percent.

I was in Brussels last week as a guest of the European Commission, and witnessed the heightening fears of cascading defaults if Europe's third biggest economy collapsed.

Here's my analysis broadcast on the 10 November edition of the ABC's AM program.

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