"Italy represents a case where for a variety of historical reasons — and perhaps marketing — among the bondholders there appear to be a lot of ordinary individuals. If that is the case, which it appears to be, when you make them bear the cost you are really going after depositors, like happened in Cyprus, which I think the consensus was was a bad idea.
"A rule that works most of the time, that you ought to let the bondholders bear the cost looks like it may not be the right rule for Italy."
Stiglitz: "This is a case where I think the European rigidity may have very high costs both for democracy and for Italy, and for in the end, if there’s a referendum, the future of the eurozone."