Europe is experiencing “a slow motion run on sovereign debt” that will continue to deepen the Eurozone debt crisis without a policy reversal in the European Union.That is the view of credit analyst Roger Doig, of global investment house Schroders, who said several troubled countries would find it difficult to roll over their debt as it matures, as institutions choose not to reinvest.Mr Doig, who was in Bermuda yesterday to speak at the third Schroders Investment Conference at the Royal Bermuda Yacht Club, said Italy faced a particularly difficult situation.“We’re seeing a slow motion run on sovereign debt,” Mr Doig said. “For example, Italy, by the end of next year, has about $500 billion of sovereign debt to roll. If investors refuse to roll the debt, then Italy will have a general funding crisis.”Institutional investors who do not believe that sovereign debt is “risk free” are likely to take their money at maturity and invest it somewhere else, Mr Doig said, adding that this was already happening.Italy, with around 1.9 trillion euros of public debt, is by far the biggest among the Eurozone strugglers, and dwarfs the economy of Greece.Mr Doig’s comments come as European leaders prepare to meet on Sunday to thrash out their latest plan to tackle the crisis. Anything looking like a solution is unlikely to be announced as there are fundamental disagreements between the two economic powerhouses, Germany and France, as well as among the rest of the 17 Eurozone countries.Pressure is growing for the troika of the European Union, the International Monetary Fund and the European Central Bank, to come up with a plan to resolve the urgent problems of Greece, with calls for institutional bondholders to take larger losses on their Greek debt holdings than the 21 percent ‘haircut’ they agreed in July and for the firepower of the European Financial Stability Facility (EFSF) to be increased from its current level of 440 billion euros.Mr Doig, an expert on the creditworthiness of European banks, said most institutions were sufficiently robust to shoulder such losses.“That is not really the problem,” Mr Doig added. “If Greece gets debt forgiveness, then what’s to stop Ireland, Portugal and Italy asking for the same thing?“The fear that people have with the concept of private-sector burden sharing is that it could extend to Italy, which has the third largest bond market in the world after the US and Japan. That would be a serious solvency issue.”One proposal is to turn the EFSF into an insurance company, guaranteeing 30 percent of the troubled sovereign debt in an attempt to reassure investors. Problems with that, Mr Doig suggested, included that investors would not be confident of the insurer’s ability to pay out on claims, because the correlation of all the sovereign debt issuers poses the risk that if one were to default, others would likely follow.Also, a guarantee on 30 percent of principal was not high enough to persuade investors who have been used to viewing sovereign debt as “risk-free” to keep buying the bonds.Then there was the risk that one of the major contributors to the EFSF, France, could lose its triple-A credit rating, thereby increasing the amount of money it would have to put up, feeding into a vicious circle.So is there a solution that could take the Eurozone off the road to financial disaster? In Mr Doig’s opinion, the ECB should be following the example of others.“The realistic solution is that the ECB has to monetise, or print money, and inflate away these debts,” he said. “This is broadly the policy taken by the UK and the US.“What you are doing then is letting the currency take the strain of adjustment. The people hurt by it would be the non-domestic holders of your debt.”With a weaker currency, countries become more competitive, helping them to export their way to growth.“The ECB is opposed to this, because it believes a weak currency in the long term is not in the interests of economic stability,” Mr Doig said.What is clear, he added, is that there is no painless way out for Europe, whose problems were exacerbated by the fact that a joint currency had come before political union, meaning that 17 countries had to find agreement on every move made.