There's been a lot of talk recently about the need to ring-fence certain economies in Europe. These aren't the economies that have defaulted or been bailed out; these are the economies that are too big to fail. Italy is the most glaring example.
The news from Europe this morning starts with Italy, which had to pay a euro-era record rate to borrow money from the bond market. Meanwhile, Hungary's bonds were downgraded to junk status.
Amid the uproar over Italy's rising borrowing costs, some forget that the country managed to pay even higher interest rates on a heavy debt burden back in the 1990s.
It isn't just debt that plagues the Italian economy. Newly-appointed prime minister Mario Monti will need to increase tax collection, reduce bureaucracy and reform the economy at the root.
