Ancient Greece and Rome created the civilization of Western Europe. Will modern Greece and Rome now bring it crashing down -- at least in the form of the eurozone?
Those fears may still be premature, but they have been mounting for months now and the latest news about the Italian economy deepens them dramatically.
Europeans woke up on November 10 to learn that financial traders who buy and resell government bonds are demanding over 7 percent interest on some Italian bonds. That is -- for many investors -- a level of interest as psychologically important as the famous Rubicon was for Julius Caesar.
When Caesar crossed the Rubicon River, it was the point when it became obvious to all he intended to march on Rome, seize it, and become emperor. There was no turning back.
For the financial world, when the interest rate that a government must pay to borrow money rises to more than 7 percent, it's the point at which many states have real trouble paying back the money -- plus interest -- that they borrow.
So, no wonder that newspapers are full of worries about Italy's economy. The 7 percent Rubicon is the one at which three eurozone states -- Greece, Ireland, and Portugal -- have already plunged into such fiscal crisis that they had to turn to their EU partners and world financial institutions like the International Monetary Fund (IMF) for massive bailouts.
To make matters worse, it's not just a question of Italy becoming another ailing Greece. Italy's economy is the third-largest in the European Union and represents 20 percent of the EU's gross domestic product (GDP). Should Italy require massive bailouts from its euro partners, it's by no means certain that they can afford to do it.
Here is just one measure of the difference between what a sick Italy would represent to the eurozone, compared to the already prostrate Greece: Athens needs about 130 billion euros ($177 billion) to cover its borrowing needs for three years. Rome would need that much to cover its borrowing needs for just six months.
Reasons For Hope In Italy
The immediate question, of course, is just how at risk is Italy. For now, there is still a ray of hope.
The 7 percent interest rate that is setting off alarm bells was demanded by commercial investors trading on what is known as the secondary market, where investors buy and sell longer-term bonds they purchased from a country perhaps years ago.
At an auction of bonds on November 10, Rome still managed to sell one-year bills at an uncomfortable, but relatively manageable rate of 6 percent.
There is another ray of hope, too. The alarm bells are going off at a time when Italy itself is in deep political crisis and many investors -- but not all -- are losing faith that the Italian economy can yet cure itself through austerity measures. Should Italy emerge from its political crisis in the weeks ahead, investors' faith could strengthen.
The head of the IMF, Christine Lagarde, held out that hope. "Political clarity. It's much needed in Greece, it's much needed in Italy," she told reporters during a visit to China.
"There is clearly some rumors, allegations, trepidations, expectations, no one really understands exactly who is going to come out as the leader, and when, and I think that confusion is particularly conducive to volatility," Lagarde added. "So, from my perspective as IMF [chief], political clarity is conducive to more stability."
...Or The Opposite
For Italy, the crisis centers on Silvio Berlusconi. The prime minister has pledged to step down once parliament has approved austerity measures to prevent the country's debt crisis spiraling out of control.
But on November 9, worries over his true intentions ramped up as he gave a barrage of interviews to the Italian press where he said either a new government would be formed or an election should be held.
When Berlusconi's defense minister, Ignazio La Russa, said the favored date for elections was February, fears that Italy could remain in crisis for months more rose sharply.
It's still too early now to know exactly when Berlusconi will hand over the government to a new leader or whether that leader will be a technocrat capable of better guiding the country's economy.
It is equally too early to know if such a handover alone will calm investor fears about Rome enough to reduce fears that Italy could become the next sick man of Europe.
The Die Is Cast
The only certainty is that no one should underestimate the possibility of Italy's economy failing, or the size of the impact if it did.
Italy's government has borrowed so much money in recent decades that it already is straining to pay it off. The debt, $2.6 trillion, is among the largest in the world and far greater than that of other European countries touched so far by the eurozone crisis.
Once a country is that deep in debt, getting out again is very difficult. To make payments on its debt and prevent it from growing further in the future, Rome must either raise taxes or make spending cuts and both measures are unpopular with the public.
The country's economy cannot simply grow itself out of debt because, according to IMF forecasts, the economy is set to grow by less than 1 percent over the coming three years.
If Italy were to default on its debts, the defaults could destroy confidence in the euro and possibly break apart the eurozone. At the same time, an Italian collapse would also deal heavy blows to other countries around the world whose banks hold billions of euros in Italian debt.
For everybody, the best hope is that Italy manages to pull through. Those hopes rest on the commitment of ordinary Italians to get through their financial crisis.
"I think that we'll avoid default thanks to the commitment of ordinary Italians, who are good at what they do," says Simona Perini, a financial adviser in Rome. "Otherwise, we are all finished. I am confident, I believe in the ordinary Italian."
Julius Caesar, marching on Rome, said much the same, only in different terms: "Alea iacta est." The die has been cast.