FAST FIVE: A Big Old Problem Just Re-Erupted On Eurozone's Southern Flank

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Last week, Italy's coalition government slashed its growth forecast for the Italian economy in 2019 to 0.2% – the weakest forecast in the Eurozone – from a previous forecast of 1%.

Italy already boasts the largest public debt pile in Europe in nominal terms, clocking in at €2.14 trillion, as well as the second largest in relative terms after Greece's twice bailed out economy.

Of course, in these yield-starved times investors will gobble up higher yielding Italian bonds, at least for a while.

Italy is home to an extremely fragile financial sector with the highest NPL ratio and lowest return on assets of any of the major European economies.

The French government has already warned that an economic recession in Italy could pose as great a risk, if not greater, to the EU than Brexit.

Categories: ZH