Italy's debt crisis: Why everyone is panicking

Fears that Italy will not be able to pay its creditors raises fears of another global economic meltdown

Italian Prime Minister Silvio Berlusconi is out and economists say the country's debt is way beyond what it can manage long-term.
(Image credit: REUTERS/Sebastien Pirlet)

World financial markets erupted in turmoil this week, as fears mounted that Italy could default on its massive government debt. The crisis has already cost Italy's controversial prime minister, Silvio Berlusconi, his job. But why is it scaring people across Europe, and even here in the U.S.? Here, a brief guide:

Is Italy really in such bad shape?

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