If it's not one eurozone country, it's another. Relief over Spain's bank bailout has swiftly dissipated into worry over Italy, which may not have the economic juice to pay its massive national debt and simultaneously fund its part of the various euro bailouts, the New York Times reports. Italian government bonds hit their lowest prices in months yesterday, as Italy's main stock index put up the worst numbers in Europe.
As Europe's third-largest economy, Italy faces a hefty bailout bill, and may have to borrow at high rates to pay it. "There is permanent risk of contagion," says Prime Minister Mario Monti, who has implemented tough debt-reduction measures. Next he intends to try to increase growth—which is badly needed, since Italy has unemployment north of 10% and is expected to see its economy shrink 1.5% this year. "Somebody better do something," Fiat CEO Sergio Marchionne said yesterday, "before we get to the point of no return."