As Bloomberg reminded us on Monday, Italy's $1.7 trillion pile of public debt - the third largest sovereign debt pool in Europe - is threatening to set off a chain reaction that could hammer banks from Rome, to Madrid, to Frankfurt - and beyond.

Just the mention of the precarity of Italian debt markets "can induce a shudder of financial fear like no other" in bureaucrats and businessmen alike - particularly after Italy's economy slid into a recession during Q4.

While much of Italy's debt burden is held by its banks and private citizens, lenders outside of Italy are holding some 425 billion euros ($486 billion) in public and private debt.

The Bloomberg analysis of Italy's financial foibles follows more reports that Italy's ruling coalition between the anti-immigrant, pro-business League and the vaguely left-wing populist Five-Star Movement has become increasingly strained. Per BBG, the two parties are fighting a battle on two fronts over the construction of a high speed Alpine rail and a legal case involving League leader Matteo Salvini over his refusal to let the Dicotti migrant ship to dock in an Italian port last summer.