Do you know exactly how bad things are inside the Eurozone? If not, here is something very shocking. At US$ 2 trillion, Italy is one of Europe's largest economies with about 6 million companies. And it is also one of the worst affected by the crisis. The country saw nearly 365,000 businesses shutting down last year. That is like a 1,000 businesses going belly up every single day. It must be noted that the economy contracted by 2.4% during this period. The small and medium-sized businesses are the worst hit. In fact, 50% of the small firms are being unable to pay their employees on time.

Italy's economic worries are not new. Its economic growth during a major part of the last decade was just half that of the European Union. Who is to be blamed for this? Some major factors include a clumsy bureaucracy, rigid labour laws and declining competitiveness in the global markets. The Italian government took up austerity measures last year to deal with the crisis. Tax increases and spending cuts have pushed Italy into one of the worst recessions of any Eurozone economy.

Italy's crisis, in a way, represents the overall gloom in the Eurozone. It poses serious long term risks to growth and stability in the zone. In an increasingly interconnected global economy, the adverse impact of this is going to be felt everywhere. India is certainly not immune.