EU Put in Perspective

I just found this caption on the Telegraph, this should give some perspective as to how dire the situation is. On the left, Italian debt, in the middle, the size of the rescue package that would be needed by Italy and on the right, the EFSF funds available for all of the EU including Portugal, Ireland, Greece and Italy.

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This chart shows the EFSF rescue package available as a proportion of Italian debt. 

Furthermore, from the Telegraph,

"Italian bonds rise past 'unsustainable' 7pc barrier and there are fears the contagion is spreading to Spain and France, as the ECB reportedly buys Italy's debt and Germany is under pressure to act to save monetary union."

Here's today's Italian Bond chart (thank you S.H.)

Yesterday you may recall that the 10 year Italian bond "nearly" hit 7% (around 6.8%), today as this intraday chart shows, it peaked around 7.450 % and if the ECB did step in it would likely have been around the green square, still the yield is above 7.2%.

As a reminder, this is the level in which Portugal, Ireland and Greece sought aid.

Back in Italy, Reuters reports Italian President Giorgio Napolitano said on Wednesday:

"Within a short time either a new government will be formed which can take any further decisions needed with the support of parliament or parliament will be dissolved and an election campaign will begin within the tightest time frame," 

In bold is Credit Suisse's option #3, the worst possible outcome as elections wouldn't be held until January at the earliest and perhaps as late as April, leaving a HUGE timeframe of uncertainty when events causing Italian yields to soar to unsustainable levels are occurring overnight. There won't be an EU and the continent will be deep in recession by the time elections are held.