http://www.ft.com/intl/cms/s/0/576f5c6e-8a11-11e5-9f8c-a8d619fa707c.html#axzz3rfMwjXj0
Italy's ability to sustain a healthy rate of growth is critical --
for the country's political stability, for its young people with no hope
of finding work, for debt sustainability and in particular for its
future in the eurozone. The euro has brought Italy nothing but
stagnation. Real GDP is now at the same level as at the start of 2000, a
year after the euro was launched. GDP today is 9 per cent below the
pre-crisis level in early 2008.
...
The stock of non-performing
loans as a percentage of all loans is about 10 per cent, which is close
to the peak level in the current cycle. Many of the small and
medium-sized banks are in effect insolvent. The clean-up of the banking
system -- following the 2008 crisis and the two subsequent recessions --
has yet to happen. If it does, it will take place in a much tougher
regulatory environment. From next year EU "bail-in" rules take effect.
Then the Italian government will no longer simply be able to bail out
banks but will have to make bondholders and depositors pay up first. Can
we be sure the rotten banks will continue to sustain the recovery in
this environment?''
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