OK, folks, this is getting really serious. Spain is bad enough, but Italy â€¦
Italy has puzzled me a bit. On one side, it has a lot of debt (net 99 percent of GDP), and if you look at prices and wages it looks almost as overvalued as Spain. On the other side, Italyâ€™s deficit isnâ€™t nearly as bad (5.1 percent in 2010, sez the IMF), and the economy doesnâ€™t seem to be suffering as much as youâ€™d expect.
But now Italyâ€™s under pressure too.
Bron: Paul Krugman Blog