London (CNN) – Greece’s future – and that of Europe – is in disarray after the decision by Prime Minister George Papandreou to call a referendum on its bailout. Now Italy’s soaring funding costs are injecting fresh anxiety into the crisis.
Italy is being crushed by investors, who are now insisting on yields of up to 6.4% to invest in its 10-year bonds. Markets regard 7% as a benchmark which, if breached, makes it extremely difficult for countries to fund themselves.
So these levels are now sending red alerts: Italy is flirting with the danger zone. This, over and above the sheer panic and difficulties which would ensue should Greece decamp to the drachma, is a very real problem.
(CNN) – In an interview with the New York Times last year, leading hedge fund manager Jim Chanos described China’s property market as “Dubai times a thousand."
He was of course referring to the collapse of the Gulf state's overheated real estate market in 2009 after a six-year boom.
In another interview with Bloomberg during the same period, Chanos said China – which has enjoyed its own boom – was on a “treadmill to hell.”
"They can’t afford to get off this heroin of property development," he claimed. "It's the only thing keeping the economic growth numbers growing.”
Editor's note: As world leaders gather in Cannes for the G-20 summit, CNN's Diana Magnay and Phil Han are traveling around Europe this week to talk to European youths about the economic crisis.
Munich, Germany (CNN) - What a start to our roadtrip! We couldn't have hoped for a more articulate, engaged group of students to join us at the Zeitgeist cafe in Munich. A conversation that went on long after our little filming session was over.
A big thank you to Felix Hesse, Birgit Biehler, Ole Foerster, Chris Menig and Michael Grossman for sharing your views. Here's what you had to say:
On the Greek Prime Minister George Papandreou's decision to call a referendum: “We're all dependent now on the decision of the Greek people. And that's dangerous; people think in their national interest first before they think European. And that's not necessarily a good thing.”
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