Is Italy on the verge of financial collapse?

November 10, 2011

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(AP/Daniele Badolato, Lapresse)
In Turin, Italy, a man participates in a strike against austerity measures introduced by Prime Minister Berlusconi.

This week, Italy’s financial woes have dominated international headlines. The European Union is concerned the country won’t be able to pay off its massive debt. The economic crisis is so acute it looks like the country’s prime minister, Silvio Berlusconi, may be stepping down. That’s a feat, given Berlusconi has survived more than 50 no-confidence votes in the past. 

Harvard economist Alberto Alesina is author of the book The Future of Europe: Reform or Decline. He tells Worldview he fears Italy, unlike Greece, is too big to bail out.