Mario Monti: we have a week to save the eurozone

``Italy's prime minister, Mario Monti, has warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral that could threaten the political and economic future of Europe.''

Also see Debt crisis: desperate Monti needs Merkel summit deal to stop revolt at home --

"Monti is desperate. Reform fatigue has breached breaking point," said a top Italian official. "There is a feeling here that the euro is basically dead already. Unless Germany offers a road map out of this crisis, Monti is not going to be able to hold it together much longer."

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There is mounting bitterness in Italy that it has been pushed deeper into crisis by the perverse mechanisms of the euro itself. The country is clearly not a basket case on any measure.

It will have a primary budget suplus of 3.6pc of GDP this year, and 4.9pc next year, the best in the G7 bloc.

Combined public and private debt is 260pc of GDP, similar to Germany and much lower than France, Spain, or the UK. With private wealth of €8.6 trillion, Italians are richer per capita than Germans.

Italy scores top on the IMF's long-term debt sustainability indicator at 4.1, ahead of Germany 4.6, France 7.9, the UK 13.3, Japan 14.3, and the US 17.

The country has been through a decade of stagnation, with growth averaging just 0.6pc, but that would not normally cause a bond market crisis.

Critics say the eurozone's policy of combined fiscal and monetary contraction is what is doing most damage to Italy's debt trajectory.