Italy appears to be moving toward political stability with reports that respected banker Mario Monti may become the country’s next prime minister. But can he succeed in reversing years of political stagnation? If he doesn’t, Rome’s problems could spell the end of the European currency union.
The third scenario would also be devastating for the global economy. In fact, says Boysen-Hogrefe, the consequences would probably be even worse than those of the 2008 Lehman Brothers bankruptcy.
The only good thing about his worst-case scenario is that all players are aware of the disastrous consequences were it to become reality. Despite all speculation over what happens next for Italy, it seems clear that euro-zone leaders will do everything in their power to stabilize the country.