The discussions with China for it to finance Italian national debt repayments in the coming years, which took place a few weeks ago, seem to have come to nothing. It would seem that China wanted outlets for its cheap exports which Italy could not guarantee.
This means clearly that the EUROZONE must quickly define what in future the policy will be if any eurozone country becomes bankrupt. Will such a country be propped-up as in the case of Greece, or will Italy be left to sink because the EUROZONE does not have 1900 billion Euros readily available to cover the total outstanding national borrowings of Italy ?
EU treaties have no rules to cover such a problem. The EU Treaty prescribes that there must be a unanimity of all 29 countries to change the Treaty. Realistically, the only way forward, and fast as well, is for the 17 EUROZONE countries to sign up to a EUROZONE TREATY. Designing such a treaty will also take time, particularly if it must obtain the approbation of National Parliaments !!!
Non-Eurozone countries will definitely resist being dragged into paying for the cost of any financing of Eurozone countries.
The next step will be to sound-out what help the IMF can provide !!! The problem there is that NON-EUROZONE countries in the IMF will be wary: they do not want extra risks !!!
The irony of the whole situation is that Angela Merkel and Nicholas Sarkozy (or MERKOZY as they are already known) both have to face re-elections in the coming two years in their countries !!! Making simple and logical decisions can sometimes become a real problem !!!
It would seem that Italy will have to face the prospect of paying through the nose for refinancing loans on the world money markets while waiting for a EUROZONE solution.