Italy is already causing us concern today. The big problem is the ailing banks. The new Government is considering State aid. Does that make sense? The European rules permit that. Even Germany put public money into the banks at the height of the crisis. At that time, Italy did not.
In my view, much more important than the question of where the money comes from is that there is a clear-out in the banking sector. There are too many banks in Italy and they are not profitable enough. 3/3  BIS central bankers' speeches