Big troubles

"Since the middle of last year the net capital flows [in Italy and Spain] have been entirely outwards, at a considerable pace. In Spain’s case those outflows have continued to accelerate through the second quarter and are currently running at an annual rate of around 50% of Spanish GDP. (...)

Until or unless confidence in Spain and Italy’s membership of the euro is restored, it is likely that capital outflows will continue, maintaining an unsustainably high cost of capital for both the private and public sectors and putting downwards pressure on domestic demand. So it is of utmost importance that the European authorities begin to implement the recent summit announcements quickly and effectively. Unfortunately, it seems the opposite may more likely be the case."

in "European economics", by Yiagos Alexopoulos of Economics Research, Crédit Suisse