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Italy: Too big to fail;Too big to bail!

Another week of European drama - only difference from last week that center stage moved from Athens to Rome. The economic crisis cost one more powerful prime minister his job (don't feel sorry for Silvio Berlusconi since he had 3 years to fix Italy's problems) 
With crisis finally moving from PIG (Portugal, Ireland, Greece) to PIIGS (with addition of Italy and Spain), Euro has reached cross-roads. Both Italy and Spain are "too big to fail and too big to bail". This means both these countries need to fix their problems on their own with some support from ECB. Germany/France cannot bail Italy/Spain otherwise they risk getting engulfed by crisis themselves. Already France is at brink of losing its prized AAA rating. European politicians are at least taking steps by installing technocrats like Mario Monti in Italy as prime minister. Since he is short-term prime minister, he has nothing to lose. He should convert crisis into opportunity and forcefully move in freeing up Italian economy from clutches of government into free enterprise. If Mario needs any guide, he should look at how India handled situation in 1991 when Indian Government had to keep gold reserves with IMF to get $$ to fund. Then Indian prime minister PV Narasimha Rao with help from then finance minister Manmohan Singh (current prime minister) converted the crisis into opportunity and freed Indian Economy. 
The outcome of experiment called Euro would be decided in 2012 and most of it would depend on how Italy and Spain handle their debt crisis.
For investors, these are exciting as well as dangerous times. So be careful navigating  your investments!
/Shyam

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