Anxious eyes now turn to Spanish and Italian debt

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WITH the issue of Greece’s debt at least temporarily dealt with, all eyes are turning to the large Mediterranean countries such as Spain and Italy which also have looming debt problems.

The newly-leveraged one trillion euro bail-out fund is designed to protect such countries from ongoing market turmoil.

But an economics expert from Sheffield Hallam University warned of more potential crises despite the latest agreements.

Dr John Singleton said: “If there had not been a deal, there would have been a fairly rapid crash and maybe some European banks would have failed – and some governments would have failed to repay their debts.

“It’s possible these things will still happen, but at least they have been delayed.

But he added: “It’s quite likely there will be more crises of the kind we have been experiencing. The Italian situation is one everyone has in the back of their minds, because the Italian government is in disarray and nobody is sure they will stick to their promises to improve their budgetary situation.”