Italy engulfed in financial Spaghetti Junction

The crisis in Italy and the Eurozone debt nightmare is becoming like navigating spaghetti junction in rush hour.The complexities of the crisis and the ramifications for the world economy if country by country finds themselves insolvent make the mind boggle. We have built our societies on debt and some might see current events as divine retribution for greed – a natural reordering of an unsustainable world in which wealth has been created by manipulation,expoitation and massaging of the figures and not by plain old fashioned productivity and hard work.

We are being warned that the Eurozone crisis is worse than the banking crisis of 2008. Italy’s debt interest rate stands a 7% this morning described as unsustainable – I allowed myself a wry smile when I read that Barclays has a ¬£27.5 bn holding in Italian debt – hard to feel sorry for their potential losses when they levy an interest rate of 30% on debt ridden Barclaycard customers – yet this punitive interest is in their eyes perfectly sustainable !









5 thoughts on “Italy engulfed in financial Spaghetti Junction

  1. I do find it incredible that we can be in a situation where countries will be defaulting on their debts and becoming bankrupt. What happens to the country next? How do they get back to being financially viable? I find it hard to get my head around it as we’re used to companies going bust but countries and all that entails is mind boggling! Do you know of any other historical examples?

    The knock-on effects across Europe are also scary. The UK as a tiny island in a big world has punched above its weight for so long in part because we had the purchase on politics and ideas, but now I really can’t see a way that we can remain a country with real world power especially as we don’t seem to have any way to make money!

    • Isn’t it ironic that Germany is leading the way in the Eurozone and yet in the 1920’s had hyperinflation and financial meltdown which indirectly led to the rise of Hitler ?
      Britain has punched above its weight as you say and I feel we need to come out of the EU but maintain a trade agreement if we are to have any hope.

  2. I’m far from an economics expert but my impression at the moment is that all this rushing around trying to sort out bailout packages is really just prolonging an inevitable crash. Maybe it would be better to let it happen, even with the awful consequences, so everyone can just get on with rebuilding what’s left of the european economy. Waiting for it to happen seems more dangerous somehow.

  3. I know what you are saying – the conundrum is how do you change the culture of reckless spending and corrupt public life as in Greece for example – the programme about ” going greek” for a week was a real eye opener! If individuals, banks and even country know they can rely on a bailout they will never change. Beside Italy is possibly in too much debt for a bailout to be possible – one day children will learn about this crisis in their history textbooks- lets hope the world economy has found a better way of functioning by then !

  4. I can’t see that either Greece or Italy can pay off their debts so surely a crash is inevitable – at the moment we’re just proping up Greece to enable her (though it should be him) to pay off the interest….. totally unsustainable! Still, I have no idea what a bankrupt country looks like – a bankrupt company ceases to exist (or pops up somewhere else as a new legal entity – countrys can’t just disappear. The media seems to be spending all it’s time reporting the so called news (or lack of it) but no time at all mulling over the possibilities of what it all might mean….. I’d love to know, in the meantime, we’re growing lots of our own vegetables and turning the heating down!

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