Here's Who Gets Smashed If Italy Goes Kaboom

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A few weeks ago, everyone was afraid that Italy would have to go the way of Greece.  The Italian Government passed austerity measures, but nothing is looking up for the world’s eighth largest economy. Right now, Italy has the dubious honour of having more bets against it than any other country.  Gross credit default swaps on Italian bonds are at $306 billion.  Yields on 2-year Italian bonds surged to 4.78%.

Also today, Italian banks are taking hits and it’s already affecting other European banks.

Italy’s public debts are twice the maximum allowable for Eurozone countries. The Treasury has to come up with 500 billion Euros over the next three years.  Even though the government has agreed to major spending cuts, there is so much wrong with their economy that nobody can be certain that they can keep up with payments. If Italy can’t pay its dues, banks all over the world will be vulnerable.

Greek banks hold $700 million in Italian debt

Source: NY Times, Reuters

Portuguese banks own $5.2 billion in Italian debt

Source: NY Times, Reuters

Belgian banks hold $25.8 billion in Italian debt

Source: NY Times, Reuters

American banks hold $36.7 billion in Italian debt

Source: NY Times, Reuters

Japanese banks hold $40.6 billion in Italian debt

Source: NY Times, Reuters

Dutch banks own $45.3 billion in Italian debt

Source: NY Times, Reuters

Irish Banks hold $46 billion in Italian debt

Source: NY Times, Reuters

Spanish banks own $47 billion in Italian debt

Source: NY Times, Reuters

British banks own $77 billion in Italian debt

Source: NY Times, Reuters

German banks own $190 billion in Italian debt

Source: NY Times, Reuters

French banks own $511 billion in Italian debt

That's 20% of France's GDP and more than two times as much as Greece owes everyone.

Source: NY Times, Reuters

French banks fell in value yesterday

On July 11th, French banks BNP Paribas, Credit Agricole, and Societe Generale all fell by more than 5% on fears over Italy's ability to pay it's debts.

Source: Bloomberg

Imports account for 24% of Italian GDP

2.5% of German GDP depends on exports to Italy. Libya, Albania, Switzerland, and Romania also depend on exports to Italy. If demand in Italy falls, those countries and others will feel the pain.

Source: Washington Post, World Bank, CIA

Government debt is at $2215 billion, about 120% of GDP

The government owes almost $37,000 for every man, woman, and child in the country.

Just over half of Italian government debt is held domestically.

Source: Reuters

176 billion Euros of Italian bonds will come due by the end of 2011. Over the next three years, Italy will have to pay 500 billion Euros to bondholders.

Italy is on the hook for about twice as much as it took to bail out Greece, Ireland, and Portugal put together.

Source: Bloomberg, Reuters

What happened over there?

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