No one know if Italy can pay it debt back. If you look at the number, they are owning 130% of their annual income. So, it is possible that they can pay the debt, but it is need some changes.

Here is an example, Mario makes $100,000K a year. And he bought a 130K house. That is totally ok with 10 -20 year mortgage, and he should have no problem to repay this debt. Well, problem is Mario have horrible spending habbit. He keep buying jewlery to princess toadstood, and keep taking her on trip. Well, now he don’t have money to pay the mortgage.
What should he do?
1. Print money – he cannot do that because (unlike US) they don’t have control of their printing press.
2. Default – No one will allow them to do that because it will screw everyone.
3. Loan modification – Hair cut, whatever they need to do to buy sometime.

Whatever they choose to do. Mario need to dumb Princess Toadstood, and save his money for his debt.