Newton: Italian bailout could spell end for the eurozone

Newton's managers have warned an Italian bailout would cause deadlock in the European banking system and herald the end of the eurozone in its present structure, as the sovereign debt crisis deepens.

Paul Brain, head of fixed interest at the firm and manager of the £709m International Bond fund, said an EFSF bailout of Greece, Ireland and Portugal would be feasible, but a rescue package for Italy would overstretch the lending facility. The European Financial Stability Fund's available bailout cash stands at €440bn, which would not be enough to support Italy if the economy collapsed, Brain said. "While the three PIGs will survive without compromising the European funding structure, if Italy and Spain were to join the rescued league, the system would not be able to sustain it," he a...