"if the situation worsens, which now seems hardly impossible, the consequences could be very damaging for Italy. "Our most probable scenario is elections in early 2014 but we do not exclude even sooner than that.
The markets are reasoning in a similar way. If there is no solution, the spread will rise to 300 (3.0 percentage points) in a few days and the calm period for the Italian stock market will come to an end. Bank stocks will be particularly hard hit and credit costs will continue rising. The sooner the elections, the worst the damage for bonds." - in brecorder
Related ETFs: iShares MSCI Italy Index ETF (EWI)
Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.