THE INDEPENDENT: EU team heads for Rome as Europe's markets fall sharply
Christine Lagarde, managing director of the International Monetary Fund, warned yesterday that the world is facing a "lost decade" of economic growth thanks to a eurozone sovereign-debt crisis that is spiralling out of control.
Ms Lagarde was speaking in Beijing on a day when the perilously fragile state of the Italian economy – the eurozone's third largest – came into sharp focus when the borrowing rates of the Italian government shot above levels which have forced other eurozone states to seek international bailouts.
Amid increased concern that Italy might be heading for a default, reports from EU sources in Brussels said that German and French officials had held "intense consultations" about setting up a more integrated and potentially smaller eurozone. The move raises the possibility that one or more countries might have to leave the eurozone.
Investors and traders desperately sold off Italian debt yesterday morning, pushing the yield – or interest rate – on 10-year Italian bonds to 7.4 per cent.
At such elevated borrowing rates, Italy will be unable to roll over its €1.9trillion (£1.6trn) sovereign debt pile, raising the prospect of an uncontrolled default by the country, an event that would plunge the global financial markets into chaos. » | BEN CHU | Thursday, November 10, 2011
