Italy's Crisis: Why You Should Worry

Yahoo News /ABC
"Now you might say, O.K., then, I’m sorry for the Italians, I like Italy, but…why does this matter outside Italy?

Remember how markets went south – when it looked like Greece might default on its debt? Well, Italy’s debt is FIVE TIMES greater than what Greece owes. It’s been a messy process (and it isn’t over) as the Eurozone economies have struggled to bail out Greece. It’s hard — almost impossible — to see how the rest of Europe could (or would) muster the political will and actual cash to bail out Italy.

Right, got it, and really, I feel badly for Italy. But why does this matter for us?

Here’s a simple equation to keep in mind: Default + no bailout = Economic collapse. And here are some facts: Italy is the world’s 7 th-largest economy; while Greece makes up 2% of the European Union’s GPD, Italy makes up 17%. As one of my colleagues put it today, an economy that size will not collapse in an orderly way."