Here’s the most near-term and acute challenge for Italy and Spain right now. Both nations face a large wave of government debt coming due over the next three years, as shown by their debt maturity profiles below from Der Spiegel.
Italy: 251.5 billion euros of debt maturing this year, followed by 192.2 billion in 2011, and then 168.2 billion in 2012. This is about 32% of Italy’s $2.3 trillion GDP (GDP based on 2008 data from The World Bank).
Spain: 76.5 billion euros in 2010, followed by 84 billion in 2011, and then 61.2 billion in 2012. That’s about 17% of Spain’s $1.6 trillion GDP. In this sense Spain is in better shape.
Greece, of course also has a similar problem: 15.8, 31.3, and 31.7 billion euros of government debt coming due in 2010, 2011, and 2012 respectively. This is about 27% of Greece’s $356 billion economy.
Thus on this front, Italy looks in similarly bad shape as Greece, though Greece’s currently collapsing economy compounds the problem while Italy’s meager economic growth helps a bit.
GDP charts via Trading Economics.