At the time of writing this  note before retiring for the night the yield on  Italian government 10 year bonds was around 7.3%. Probably the drop from the high for the morning of 7.48% was the result of the European Central Bank buying bonds to try and stop the rot.

So what does an interest rate above 7% actually mean for Italy?

Well as best I can discover it would mean the Italian government would need to come up with an extra €60bn a year–an extra 4.3% of GDP in taxes.

On that cheerful note, to bed with thanks that I am an Australian and not an Italian

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Peter Fray
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