While all eyes have been on the News of the World, the Eurozone sovereign debt crisis has deepened severely over the last few days. Italy’s stock market has taken a hammering, Chinese ratings agencies are warning of a potential credit downgrade, and a new corruption scandal has emerged which may potentially threaten the Finance Minister’s position at a crucial time.
EU President Herman van Rompuy has called an emergency meeting to discuss how to prevent the contagion worsening.
The problem the EU is discovering is that no matter how many times you say things are fine, you can’t buck the basic reality of the markets. If you don’t have the cash, then eventually you’re bound to come unstuck.
It’s remarkable that this story isn’t getting more attention in the UK. If you doubt that it’s a big one, try this quote from the embattled Italian Finance Minister Giulio Tremonti for size:
If I fall, then Italy falls. If Italy falls, then so falls the euro. It is a chain.
Can it get much bigger than that?