The table below shows that Italy’s monthly deficit is rapidly expanding from €2 billion/month in 1999 (prior to joining the EMU), to €9.5 billion/month over the last nine months. Let that one settle in: Italy is now borrowing nearly 10 billion Euros a month to fund its spending. And they are not alone or even the worst fiscal house in the world. Most of Europe, the US, Japan and even China are facing increasingly insane funding needs. These debts cannot be soaked up by central banks nor magically repaid because over-spending continues to compound the problem day after day, month after month. Time to admit facts, write off bad debts, cut entitlements across the board and stop adding interest payments to a tab that cannot be paid.
“Europe is in recession. While the northern countries, like Germany, have not yet entered recession, all of the indicators point that way. Things are going to get much worse in Europe before they get better. The first condition to heal a malady is to recognize what it is. So far, the European politicians have yet to recognize that the underlying problem is too much debt and overpromises…” See: The recession that won’t end