The odds of Europe solving its “Italy problem” without disrupting the European Union or the world economy just got a bit better. The Italy problem, for those who have forgotten or who never knew, is the persistence of its massive governmental debt, which in 2019 was reckoned at 135 percent of its economy (gross domestic product, or GDP). The danger is that Italy defaults.

If this happened — that is, if Italy could not meet its interest costs or principal repayments — it could trigger a global financial panic. To limit losses, investors and traders would rush to sell stocks, bonds and other financial assets.…  Seguir leyendo »