While all eyes have been focused on Brexit, a political and economic storm has been quietly brewing in Italy.

Brexit – Britain’s vote to leave the European Union — has been a major focus of international concern lately, but Italy’s problems are almost on a par with the Brexit trauma, reports Business Insider UK.

The oldest bank in the world, Banca Monte dei Paschi di Siena (founded in 1472) illustrates the fragility of Italy’s situation. The bank’s shares, which stood at more than 90 euros before the 2008 financial crisis are drowning at close to 0.3 euros. Its bad loans amount to approximately 47 billion euros; total bad debts for Italian banks are hovering at around 300 billion euros.

Italian banks appear to need a bailout, but it’s unclear whether the Italian government, which oversees a chronically weak economy and whose debt stands at 140% of GDP – second only to Greece in the Eurozone — will be able to do it. Requests for help from the European Union have been so far refused since they run counter to EU rules.

Italy’s upcoming referendum on reforms to the Italian Senate, like the Brexit referendum, could prove a critical turning point. If the yes side wins, the reforms could add political stability and give Prime Minister Matteo Renzi the latitude to solidify the economy. However, ever since the Brexit vote, fears have been mounting that the reforms will be rejected.

If this happens, a political upset could aggravate Italy’s financial and economic problems, pushing it into recession, which will lead to massive capital flight and widening spreads on Italian debt. Following the Brexit trauma, how well could the EU, and the world economy, stand up to an Italian shock?