"One year ago, Italy could borrow at 4% for ten-year bonds.
Today, these yields went as high as 7.7%. Multiply this
difference, 3.7%, by the 356 billion Euros ($491bn) that
Italy has to refinance over the next year. That's 13.2
billion Euros ($18.2bn) in additional borrowing costs, or
about 1% of Italy's GDP."
"Italy has agreed to deficit reduction of 3.9% of GDP by
2013, with about 1.7% of it coming over the next year."
". Now add another 1% of GDP to make
the same target - and that the target will move because the
economy will likely shrink further - and you can conceive
that Italy is not going to make these targets. Which is what
the bond markets are imagining right now."
"the bond traders can be more imaginative than that.
They have noticed that when Portugal and Ireland's bond
yields went above 7%, they quickly soared into the double
digits."
"The ECB could put an end to this crisis by intervening in the way the US
Federal Reserve has done in the United States. But they
continue to insist that this is not their role. That is the
heart of the problem, and until this policy is reversed, it
is likely that the European economy will continue to worsen."
