will italy need bail out if no futher significant steps taken?

monkey8

With no sign of any major steps being taken by EU leaders such as eurobonds etc is in inevitable that spain will need a bail out and then italy.
If italy is considered too big to bail out, what happens then?

Maura74

http://www.bbc.co.uk/news/uk-politics-18568527

Tony Blair has said the UK will face an "interesting choice" over whether to join the euro if the currency's current crisis is resolved.

If Europe moves forward again then Britain's going to have some very interesting choices
• UK must help reshape EU - Blair
• Blair still believes in ID cards
• Special report: Eurozone crisis

Tony Blair has said the UK will face an "interesting choice" over whether to join the euro if the currency's current crisis is resolved.

The former prime minister told the BBC he believed the UK should still be keeping open the option of joining it.

He said that looking at the "broad sweep of history" in the long term "the European integration project" was going to go ahead, "like it or not".

The UK, as a "small island nation", had to be part of it to have influence.
Mr Blair said that the only thing that would save the single currency now was to have a "grand plan" where Germany was ready to commit its economy fully - "treating the debts of one as the debts of all".

This would be difficult for Germany, he said, and would have to be in return for other countries having "precise, deliverable" programmes of change and reform that could restore European competitiveness.

As well as economic changes, political change was also inevitable with Europe needing reform of labour markets, pensions, welfare, public services the role of the state, he said.
He told BBC One's Andrew Marr Show that his former chancellor Gordon Brown had "always been right" on the economic case against the UK joining the euro when Labour was in power.

SeanW

Italy is now closer to needing a bailout as 20% of the Spanish 'bailout' is to come from Italy ...

We've heard the spiels about EU competitiveness from Eurocrat career politicians like the Maoist Barroso for a long time and its as much balderdash now as it was then.

https://www.youtube.com/watch?v=TN_1mF-3JTI

cristoir

Italy's structural deficit is low when compared with the PIGS and it doesn't (yet) have a banking problem. So it super mario continues his reforms they should be fine. Of course this assumes Greece doesn't exit or there isn't another external factor throwing a spanner in the works.

Zonda999

cristoir wrote: »

Of course this assumes Greece doesn't exit or there isn't another external factor throwing a spanner in the works.

I agree, they should be okay, although speaking with some Italian people I know, some of super Mario's reforms aren't too popular..

As for external factors, don;t speak too soon, that was the issue with our bailout, external factors.. Sure we were meant to have 3.2% GDP growth in 2012 when our bailout was negotiated in late 2010.. That worked out..

Medu

cristoir wrote: »

Italy's structural deficit is low when compared with the PIGS and it doesn't (yet) have a banking problem. So it super mario continues his reforms they should be fine. Of course this assumes Greece doesn't exit or there isn't another external factor throwing a spanner in the works.

Italy's problem isn't their deficit it's how will they refinance their debt mountain if their interest rates stay high.

Italy won't be bailed out as the money just isn't there to do it. Either drastic action is taken or the Euro is finished and Europe isn't united enough to make the tough decisions. The Euro is finished, that's pretty much set in stone.

darkman2

Italian 10 year bond yields have just passed 6%

http://www.bloomberg.com/quote/GBTPGR10:IND/chart

OP I think it's certain Italy and Spain both need full sovereign bailouts. Spain's yields are surging today aswell. The hole in the banking system is being hopelessly under estimated. Both Spain and Italy are being locked out of the market.

Ahead of them though Cyprus is to request a full bailout in the coming days.

senordingdong

cristoir wrote: »

Of course this assumes Greece doesn't exit or there isn't another external factor throwing a spanner in the works.

Won't the Spanish bailout be said spanner in the works?

kennyb3

cristoir wrote: »

Italy's structural deficit is low when compared with the PIGS and it doesn't (yet) have a banking problem. So it super mario continues his reforms they should be fine. Of course this assumes Greece doesn't exit or there isn't another external factor throwing a spanner in the works.

What about Banca Monte dei Paschi di Siena?

And the chances of there being no external factor? The whole euro issue is one great big external factor. No economy works in a vacuum so of course there will be external factors

AVN_1

From Nazi to Terminator, Europe's media target Merkel

http://www.reuters.com/article/2012/06/28/us-eurozone-germany-merkel-idUSBRE85R0BM20120628

southsiderosie

MOD NOTE:

Unless you are discussing her ability to affect an Italian bailout, this thread is not about Angela Merkel.