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If Italy goes into recession then the Euro’s over

IF Italy goes into recession then the Euro’s over. That’s one way of looking at it at least: if Italy goes into a deep recession then the game’s up for the euro.

The reason being that the eurozone just doesn’t have enough money to keep Italy’s borrowing costs down. So everyone needs to know that Italy isn’t going to increase the debt they’ve already got. However, obviously, in a recession, this isn’t possible, debt is going to increase.

So, recession in Italy means that whatever people try and cobble together to keep Italian borrowing rates down won’t work: at which point Italy goes bust like Greece.

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Posted: 19th, January 2012 | In: Money | Comment