Now Italy looks set to join Greece in the indignity of penury

Focus: There is a classical symmetry in the fact that Greece and now Italy are in the debt spotlight, but with summer approaching, does anyone really care, asks Rupert Wright

Silvio Berlusconi, the prime minister of Italy, has shown it is possible for male leaders to grow hair in office rather than lose it. AFP

There is a certain classical symmetry to the fact that it was first Athens, then Rome facing the debt spotlight. You will recall that it was Greece that enjoyed the glory and Rome the grandeur. In Greece, nobody seems to care about the debt. Why should they, you could argue. They didn't really see any benefits of the money. It is no longer a question of whether but when Greece will default. Or, at the very best, the country will be given such a long time to repay that it will technically be in default.

Greece is Greece, no longer any sort of superpower even in the Balkans and certainly not the wonder of the world as it was in the time of Pericles or Alexander the Great. Greece gave the world a number of words, all appropriate right now: catastrophe, crisis, hubris. Maybe one way to raise money would be to copyright the words and charge anybody who uses them, particularly when writing about their own economy.

Even the European Central Bank (ECB) seems to be hinting that it is getting bored with the Grecians. Jens Weidman, a member of the ECB governing council, says accepting Greek debt that has defaulted as collateral would be a step too far and would hurt credibility.

It's a bit too late for that. Greece has no credibility as a borrower. They need a debt write-off, and those who lent the money should share some of the pain. That is, after all, the business of banking: risk and reward. Take too much risk and you don't get rewarded. Of course, all that happened in the past couple of years is that private bad lending has been assumed by the public sector. But moving money about does not diminish it. Bad debts don't disappear, they grow.

Which brings us to Silvio Berlusconi, the prime minister of Italy, in many ways an admirable man who has shown it is possible for male leaders to grow hair in office rather than lose it. Breakingviews, a website that provides daily financial commentary, not always the most reliable indicator - it launched a lengthy and long-winded campaign to try to prevent Christine Lagarde from becoming the head of the IMF, something that was clearly doomed from the outset - had a good line on Italian debt. It said Italy was "too big to fail and too big to bail". And it pointed out that the most surprising thing is that the sovereign-debt crisis has taken such a long time to reach Italy.

It was provoked last Friday by a rather curious interview of Mr Berlusconi. What had maybe kept the sharks from Italian waters was the reassuring presence of Giulio Tremonti at the finance ministry. But rather than congratulate his minister on his sterling work, Mr Berlusconi decided to abuse him.

"He thinks he's a genius and everyone else is stupid," Mr Berlusconi told Repubblica. "He is the only minister who is not a team player."

What is needed in these situations is not necessarily team players but individuals who can reassure the markets. Mr Berlusconi said in the same article he would make sure the austerity package was changed during its passage through parliament to make it more attractive to voters rather than markets. Not surprisingly, markets took this badly.

As was always said during the Second World War, foolish words cost lives. Nobody may have died - yet - but Italy's cost of borrowing has risen sharply, with 10-year yields up 1.2 percentage points since the start of this month.

The crisis is so severe that Germany's chancellor, Angela Merkel, phoned Mr Berlusconi at the beginning of this week and apparently told him not to rock the boat and to endorse Mr Tremonti's good work. By all accounts, this message got through, because Mr Berlusconi cancelled a planned visit to the training ground of AC Milan, the football team that he owns, to return to Rome.

This may be a significant move in a football-mad country, but it hasn't helped pay back any debt, which now stands at almost 120 per cent of GDP, the EU's largest after Greece in proportion to the country's output. Italy owes a total of €1.8 trillion (Dh9.39tn) to its creditors - more than Greece, Spain, Portugal and Ireland combined.

That is why Breakingviews thinks it is too big to bail or fail.

What now? Well it seems more than a coincidence to me that the panic seems to occur on a regular basis just about the time of the European summer holidays. Then everybody goes away, gets sunburnt, and comes back thinking that maybe things in the Siesta Belt are not as bad as everybody thought, until next summer.