We cannot even remotely afford that an auction of Italy’s government bonds goes uncovered…That would lead to a unique lack of liquidity for the payment of pensions and salaries. It would be like Argentina.
That’s Maurizio Sacconi, the Italian Labour Minister speaking to RAI television yesterday.
And to add a little grist to that disaster-mill, here’s the Italian Finance Minister, also speaking yesterday, but to the country’s parliament:
[Italy’s debt] will be in competition with growing issues of government’s bonds by other European countries.
The below graph shows the latest CDS price for Italy - from Markit. Click for a sharper image.
Related links:
“The future of the financial world hinges on Italy and Spain not defaulting” - Infectious Greed
Bonds that go bump - FT Alphaville
Club Med - FT Alphaville
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