But Italy, unlike Greece, is not a Balkan country. It's not on the fringe of Europe. It isn't threatening to leave the Euro Zone and quit the euro as its currency, the way many in Greece are. Italy's at the very heart of Europe. It's the origin of modern Europe, the seat of the former Roman Empire and the present seat of the Vatican. It wouldn't drop out of the EU no matter what. And unlike hotheads in Greece, Italians are used to German jokes about them. If they could survive World War II as the only major country to be on both sides, they certainly aren't going to be concerned about a mere fiscal crisis.
Italy presents the risk to the Germans of seeing their own currency degraded by default. But Italy would probably be their last partner in the fiscal union even if every other country fled. After all, Hitler depended upon Mussolini.