This is a very good summary of the issues surrounding Italian banks. This threatens to seriously disrupt the entire EU if not dealt with in some type of precedent-setting manner. Business as usual will create a banking crisis of significant proportions. Everyone recognizes this but the parties are still trying to get their own way.  The EU Commission is playing at brinkmanship. Exactly one of the things that the British were upset about.

And just now, as I was about to hit the send button with this, George Friedman has chimed in with:

Our forecast is that Europe is institutionally incapable of dealing with this crisis. In fact it has done everything possible to exacerbate the crisis by trying to block Italian government efforts to stabilize the situation.  So for us the question is two-fold.  At what point does this destabilize other holders of Italian paper?  That's the minor issue.  The major issue is what happens when Italy is effectively forced to act outside the rules of the EU, which it has.  That is what the Italian exit and others look like.  They don't leave; they simply don't pay any attention to Europe.

Also factor in the IMF finding that Deutsche Bank represents the single most dangerous systemic threat in the world.  The German economy is much more unstable than people think; and as Austria's election showed, the Germanic world retains deep anti-European feelings as well.

I think we are entering “the zone,” and Britain is the least of the problems.  Politically, Austria and Italy are the major issues that the EU can't deal with.