Monday, November 7, 2011

Why the Euro May Fall Hard: Italy Has 2T Euros Outstanding Debt Coming For Renewal - At Much Higher Rates

It is no wonder the market is so nervious about Italy. Italy currently has about 2T Euros outstanding debt, cp,apred with Grece's 200 to 300B. Greece is noise in comparison. The amount to refinance in the year is greater than all of Greece's outstanding debt!

Maturity schedule (charts from BNN today):

Currently, Italy pays roughly 4.15% interest. However, the yields are now around 6.60%. That's an increase of over 2.4%. Austerity measure won't make much of a dent on the debt, will just pay part of the added interest.

Given all the problems and European wrangling to "fix" Greece, imagine to fix Italy (and Portugal, and Spain, and...)

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