AP Photo

Assunta Linza, a petite 33-year-old, and her father Giovanni, 60, graying and with the build of a bulldozer, are sitting on the family sofa in a northern suburb of Rome. Assunta is an old Catholic name that her father picked out. It represents the ascent into heaven of the Virgin Mary, and it translates as the Accepted One, or, as the case may be, the Employed One. "My name is a joke," Assunta says with a weary smile.

She is holding a letter in her hands. It's been official since this morning: She is unemployed and, beginning in June, will no longer receive government support.

It's Wednesday evening of last week, the news is on television and the traders at the Milan Stock Exchange are staring at their screens in disbelief. The risk premium on Italian...