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If Brexiteers need a real reason to leave the EU, then just look at Italy

Thousands of people take to the streets to say 'NO' to the upcoming constitutional referendum and to protest against Prime Minister Matteo Renzi's policies in Rome, Italy, November 27, 2016.
Giuseppe Ciccia | Pacific Press | LightRocket | Getty Images
Thousands of people take to the streets to say 'NO' to the upcoming constitutional referendum and to protest against Prime Minister Matteo Renzi's policies in Rome, Italy, November 27, 2016.

As the painful and quite frankly embarrassing stumble out of Europe continues for the U.K., I watch with sadness at the pathetic lack of conviction of both the previous Remain and pro-Leave camps.

It's never been easier for this journalist to sit on the fence in splendid apolitical isolation given that the pro-Brexit camp seem to not actually believe a word they are saying any more. Brexiteers seem to be tacitly admitting that their previous grandiose promises are in tatters, whether it's now a non-existent money tree for the NHS (National Health Service) or the failure of Germany to cave in over threats to tariffs on imported BMWs and Mercedes. And let's not even go there on immigration.

Mind you, the "remainers" bleat on unconvincingly about now accepting the word of a Great British population that has definitively spoken and thus must be respected. Utter codswallop. If you had the courage of your conviction then fight you weaklings. If you really believe it is a cataclysmic slide of our country into irrelevance internationally and depression domestically, then stick to your guns. What happened to politicians with balls, conviction and principles?

As the spurious Brexit mantras of sovereignty and halting the flood of foreign labor are clung to desperately, I do often wonder why one of the few legitimate concerns about the EU is rarely touted though as a good reason to get out?

I'm talking about the fact that - not unlike post-Brexit vote Britain - parts of the European continent are in an economic death spiral and everyone knows it but keep hoping that it will magically go away.

Italy is a complete basket case economically, and with 2 trillion euros ($2.29 trillion) worth of public debt it's still the great bale of straw on the camel's back that could take the whole project down.

Italy refuses steadfastly to modernize.

It refused to go with constitutional reform last year, a reform that one top Italian CEO told me was a "meta reform" essential to unlock the rest of the country's ascent into the 21st century.

Italian banks remain mired in hundreds of billions of non-performing loans. The authorities keep saying the ones where they are forced to oversee a rescue are special cases. From BMPS (Banca Monte dei Paschi di Siena) to the most recent Veneto bank bailouts, the lie that they are "one-offs" is rolled out. Why weren't they allowed to collapse without state intervention? The truth is that we all know if one goes then the whole rotten apple cart could tip.

And as for the state itself, has it taken the European Central Bank's (ECB) promise of "doing whatever it takes" to scythe through its horrific debt pile? Has it heck!

Italian debt is still at a ratio of 133 percent to the value of the country's GDP (gross domestic product) and as the Institute for International Finance put it last week "they are still vulnerable to shifts in market sentiment, and the possibility of a negative spiral of rising refinancing costs and deteriorating debt sustainability assessments (e.g. from credit rating agencies) remains a real threat."

So all you Brexiteers can have this one from me free of charge. If you want a real reason to fear the EU and its sub-clique the euro zone, stop bleating on about Brussels illegitimacy and how hordes of European diasporas are apparently ruining our country and take a look at the fact that there are one or two economies in Europe that just may be in a worse position than "good old Blighty" and that may just scupper the European project with or without the British.

—Steve Sedgwick is an anchor for CNBC's Squawk Box Europe.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

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