The fear that one of the world's largest economies could default took over the markets yesterday causing stock markets to plunge in Europe, Asia and the US. Italy's prospects have been grim for a while: its public debt is 1,900 billion Euro (120% of GDP) while its economy has been growing at a meager 0.3%. The European Central Bank has started to buy Italy's Treasury bonds in order to deflect potential default at the same time pressuring Berlusconi's government to speed up austerity measures and reforms. After years of promising structural reforms to make Italy's business environment more competitive, finally today the Government has announced specific details to liberalise the economy. Some of these reforms have been talked about since I can remember, for instance one forcing the "closed professions" (i.e. lawyers, notaries...) to liberalise their services. If the reforms will be really put in place it may mean that the Eurozone's third largest economy may become more attractive to domestic and foreign investors. Italy agrees to liberalise economy - FT.com.