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Italy

Italy is tackling nearly $2 trillion in debt.

EyesWideOpen/Getty Images

Public debt as percentage of GDP: 119

Population: 61 million

What's a sure sign that all is not right in the EU? The EU country with third-largest economy is being downgraded left and right by credit-rating agencies. Since spring 2010, the Italian government has hacked away at its nearly $2 trillion in debt, but many financial analysts have doubted that the austerity measures the country has taken will make a significant enough dent [source: McGovern]. As a result, Italy received a heaping helping of bad news about its bottom line in October 2011. Following suit with Standard & Poor's, credit-rating agencies Moody's and Fitch slashed the nation's credit worthiness scores, suggesting that Italy isn't moving out of the red any time soon [source: Winfield]. The lower the rating, the more it costs to borrow money, wedging Italy deeper into its debt problem. Perhaps taking a cue from the United States, Italy has courted China for financial support [source: Dinmore]. Although the G-8 nations (eight highly industrialized countries -- France, Germany, Italy, Great Britain, Japan, United States, Canada and Russia -- which meet annually about global issues) have struggled to keep their economies above water in recent years, Beijing has barely batted an eyelash.

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