Photo: Wikimedia Commons
From Credit Suisse’s Andrew Garthwaite, three reasons why Italy is different than the other PIIGS:
- Net foreign debt is only 21% of GDP, compared to 80-110% elsewhere in the periphery.
- Accoriding to IMF data, Italy is actually running a primary surplus (a surplus if you exclude interest payments.
- The country has a low loan-to-deposit ratio, and doesn’t rely much on ECB for funding.
Three smaller reasons Garthwaite is sanguine on Italy: It never had a housing bubble, its trade deficit is a relatively small 2.7% GDP, and the average length of its maturities (7 years) is one of the longest in Europe.