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Italy’s Debt Is Potential ‘Time-Bomb’ That May Lead to Default

Italy’s debt, the highest in the euro region last year, remains a “potential time bomb” and the country is at risk of default unless it boosts productivity, Capital Economics said.

“We think the size of the government’s debts will eventually prompt the markets to turn their sights on Italy,” Capital Markets Managing Director Roger Bootle and chief European economist Jonathan Loynes said in a report today. “A default is a distinct possibility.”