Since the ouster of former Primer Minister Silvio Berlusconi, Italy has receded from the headlines as extra-squeaky wheels Greece and Spain get the media grease. But the world’s 8th largest economy is still perilously close to bond yields that would render its public-debt burden unmanageable. Though Italians have low amounts of household debt, generous welfare-state provisions and strict labor laws have contributed to bloated government budgets and an uncompetitive economy. Technocratic Prime Minister Mario Monti is seeking to reform the Italian economy and bring government debt under control – and he’s hoping bond markets cooperate long enough for him to be successful.
Total Debt as a percentage of GDP: 314%
Nonfinancial Corporations: 82%
Financial Institutions: 76%