The Daily Beast
By Zachary Karabell
Nov. 10, 2011
Just as the Roman Empire supplanted Greece as the center of the ancient world, so too is the rapidly escalating Italian economic crisis pushing the Greek economic crisis to the side. Italy is a much larger economy—at more than $2 trillion in annual output, it is the eighth-largest economy in the world. And its sovereign debts dwarf those of Greece, at about $2.6 trillion versus a seemingly paltry $500 billion for Athens. Italy has the world’s third-largest bond market, and hence its troubles should have real systemic implications for us all.
But does it? I mean, does it really? The resounding answer in financeland is a screaming, unequivocal yes—much the same response that it gave to the Greek crisis, and to nameless crises before. Does Italy matter that much? Is it the tipping point that will plunge the world into the abyss that has been so feared and anticipated? We will know in due time, but honestly, Italy doesn’t matter—not nearly as much as it appears to.