Euro on the brink?

Overnight we saw Italy’s GDP negative for a second consecutive quarter and hence in recession, making this its 3rd recession since the GFC.  Italy is the Eurozone’s 3rd largest economy after Germany and France.  In addition to negative growth they also have over EUR2t in debt making their debt to GDP (2013, so worse this year) ratio 128% and youth unemployment over 43%.  We discussed in last week’s weekly wrap radio too that after the supposed powerhouse Germany printed a 0.1% CPI figure and the Eurozone as a whole only 0.4% (the lowest since 2009), fears of deflation are escalating.  The second largest economy France, just reported an all time record high 3.4m people unemployed which is up 4% on a year ago.  Russia ramping up retaliation for the sanctions (and the imminent threat of outright war of which sent gold and silver up strongly overnight) and fears of contagion of the Portugal banking failure, will only exacerbate an already perilous Euro economic situation.