A customer pays for fish with Euro banknotes at a fish stand.
A customer pays for fish with Euro banknotes at a fish stand. - 
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JEREMY HOBSON: Stocks in Italy are plummeting and borrowing costs are rising amid fears the Europe's third largest economy is the next domino to fall in the debt crisis. Analysts are concerned that Italy's $2.2 trillion of debt would be too much for other countries to cover with a bailout.

For more, let's bring in Isabella Bufacchi. She's a journalist with the financial newspaper Il Sole 24 Ore, and she's with us from Rome. Good morning.


HOBSON: Well the stock market in Milan has fallen to its lowest level in more than two years. Has this crisis caught Italians by surprise?

BUFACCHI: I must say, yes. I think the Italians and myself were all quite shaken because the stock exchange fall has been very rapid and huge. And also our treasuries, our govenrment bonds, the prices are going down very quickly. Now, we hear a lot of headlines on TV -- Italy under attack. And we kind of are used to this because when we had our currency, lira, we were often under attack. But when we entered into the Euro, we thought we were going into a kind of golden age where we were safe. And I think this is kind of a shock to find out that even inside the Euro, we can be under attack.

HOBSON: Even as you have these debt crises developing in countries all around you?

BUFACCHI: Yes. But we're a country that has been handling high debt for a long time. And our capability to pay back our debts has never been put in doubt. So actually there is a contageon now coming from Greece and Ireland and Portugal, which are countries that were in a condition not to be able to repay their debts.

HOBSON: Now, Italy is a much bigger economy than some of the other economies in Europe that are in trouble. Is it the sense there that Italy is too big to be bailed out and it's going to have to solve this problem on its own?

BUFACCHI: We're too big to fail. But we must also remember that Italy has got a big GDP, it's a big country. But it was also one of the economies that was hit the least during the worst crisis after the second World War. We didn't have a realistic bubble, our banking system is incredibly solid, even politics now with Berlusconi's government -- they're fighting all the time. Well what's new? And still Italy with its old structure problems has got a high reputation. All the bonds that we issue are always bought. So we're too big to fail, but we're not on bankruptcy actually. We're quite fine.

HOBSON: Isabella Bufacchi, a journalist with the financial newspaper Il Sole 24 Ore. Thank you so much for joingin us.

BUFACCHI: Thank you.