Eurozone Warning: EU Banks Panic at Huge Italy Debt

BANKS in France, Germany and Belgium are most at risk of contagion from Italy’s deepening debt crisis, new data has revealed.

Domestic banks in the Mediterranean nation are already encumbered with some £1.3 trillion (€1.5 trillion) of public debt as the cash-strapped government in Rome grapple with a weak economy which tumbled back into recession at the end of last year. But in addition to the eye-watering figures on the books of Italian banks, financial institutions in the rest of Europe have lent more than £370 billion (€425 billion), according to new analysis of official figures by Bloomberg. Lenders in France are most exposed to a sell-off in Italy with £250bn (€285.5bn) in credit extended by French banks.