Increased concerns that Italy may be the next victim of the financial infection in Europe and this caused nervous investors to sell stocks and bonds Italian and immerse the euphoria of the weekend deal to rescue the Spanish bank, said first page of the newspaper “New York Times” said on Monday.
The newspaper refers to the Italian officials who expressed concern that 100 billion that Europe promised the Spanish banks can not stop the growing problem. The main stock index in Italy was the lowest level yesterday when U.S. stocks also sank, and investors once again resorted to secure U.S. and German government bonds.
Even the Italian prime minister, Mario Monti, European technocrat who took office after the overthrow euro crisis Silvio Berlusconi in November, started to recognize the dangers to the economy of his country, says the publication.
The difficulty emerges from recession in Rome
The main concern is that Italy can not come soon enough by the recession, to pay off its huge debt. Among other concerns are the fact that Italy’s third largest economy in the Eurozone after Germany and France will have to shoulder much of the rescue vehicles at a time when struggling with their own economic crisis.
Since Italy is in recession, the government will probably have to borrow money from capital markets at high interest rates and this will exacerbate the already high her debt. The newspaper quoted Mario Monti, who believes there is a permanent risk of “contamination”. “Therefore, strengthening of the euro area is of general interest,” said Monty economic conference near Venice this weekend.
Experts and businessmen say the same conference that the infection will undoubtedly extend to Italy and this is evidence that European mechanisms to stop the crisis did not work. Few doubt the competence of the former European Commissioner Monti. Only the first six weeks as prime minister he introduced economic measures such as Italy has adopted a decade.
The government, however, Monty is burdened with a legacy of political resistance to painful reforms, resulting in the market place seems to focus on Italy. Analysts say it is only a matter of time Italy also seek help, says “New York Times.”