ITALY FACING DEBT CRISIS

Berlesconi is to address Parliament today on the crisis, Banks in trouble and Bond prices rising. Parliament then breaks upuntil September,!!!

In the meantime , Italy is banning the wearing of Burkahs in public and anyone caught wearing one will be fined 300 Euros.

'Italy Bound To Default' Says Think Tank

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7:00am UK, Thursday August 04, 2011

Italy will default and fall victim to the eurozone debt crisis due to its
weak economy, according to a think tank.










Italy and Spain, the eurozone's third and fourth largest economies, are both
facing pressure from markets to sort their economies out.

But Italy should be the focus, according to the Centre for Economics and Business
Research (CEBR), as it is likely to be the next victim of the debt
crisis.

Italy's starting debt position is at 128%, much worse than Spain's 75%.

Italian Prime Minister Silvio Berlusconi's £38bn austerity package is not
tight enough, and will not be able to repair its weak economy, say the think
tank.

But Mr Berlusconi has sought to calm fears the country is
headed for a financial abyss in his first public speech on the crisis since the
markets closed in a bid to halt stocks crashing further.

"The political system is solid," he said. "The fundamentals of the economy
are solid, our banks are liquid, solvent and have passed the stress tests.

"The markets are not taking into account our solidness and points of
strength."



Spanish Prime Minister Zapatero has delayed his summer
holiday to tackle the crisis



However, the CEBR points out that with Italy's economy twice as big as
Greece, Portugal and the Irish Republic combined, a bailout would probably be
unaffordable for the eurozone.

It would in fact mean the end of the eurozone altogether, says the CEBR.

Spain, on the other hand, will most likely get away without defaulting as its
exports remain fairly successful despite the strength of the euro, says the
think tank.

Spanish Prime Minister Jose Luis Zapatero has in recent days sought to adopt a
more proactive stance on tackling the crisis.