eurozone
Out of context: Reply #49
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A day after Prime Minister Silvio Berlusconi offered his resignation in the face of rising global market skepticism, investors revolted Wednesday, suggesting they do not believe that even a new leadership could fix Italy’s intransigent financial problems and revive its economy.
Italian bond rates crossed a crucial level of 7 percent, prompting questions about whether Italy could soon need an international bailout just as the financially strapped nations of Greece, Ireland and Portugal did before it.
“This is a new phase of the crisis,” said Nicolas Veron, a senior fellow at Bruegel, a research organization in Brussels. “This is uncharted territory.”
In a worst-case situation, Italy might possibly be even forced to abandon the euro. The departure of a nation the size of Italy from the single currency would potentially have far more devastating effects on the euro area than that of a small country like Greece.
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