The Eurozone is in a blind panic because Italian 10 yr borrowing is going to cost at least 7.5% per annum. That is the point at which Ireland, Portugal and Greece were forced to request a bailout.  Italy needs to borrow but at that sort of interest  rate, it is not generating enough income to sustain the amount of borrowing which it needs. The other fly in the ointment is the fact that there isn’t enough money within the Eurozone  to bail-out Italy. Countries such as China and Japan will be able to demand more-or-less what they want – should they feel inclined to wave the chequebook in Italy’s direction.

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