Paul Krugman: Across Europe, All Eyes Fixed on Italy

Thursday 17 November 2011

Might we see Italy go careening off the edge in the next few days? I mean, even more than it has?

The Financial Times suggests that we might, writing of a “danger zone” in an article published Nov. 7: “Italian 10-year bond yields rose to euro-era highs of 6.68 percent at one point, well into territory considered unsustainable by the markets. Traders warned that without [European Central Bank] intervention, the Italian bond markets would have seen leaps in yields that forced Ireland and Portugal to accept emergency bailouts.”