BBC: Italy Political Crisis Hits Stock Markets

Italy is in political upheaval three months after the election and protracted negotiations between Five Star and League, two parties combined that won 50 percent of the vote. President Sergio Mattarella “vetoed their choice of a eurosceptic economy minister, and appointed former International Monetary Fund official Carlo Cottarelli as interim prime minister with the task of trying to form a government with negotiations failed to produce a ruling coalition,” reports BBC News. The two parties since received approval to form a new government. If that does not work out, new elections could be scheduled before the end of the year. Political confusion could strengthen anti-establishment and euroskeptic parties. European financial markets are roiling with bond prices and the cost of debt rising. BBC news concludes that the financial stress, while high, is “not anywhere near the levels of financial stress that were evident in the peak of the eurozone financial crisis in 2011-12.” Interest rates for Italy then were 7 percent compared to 3 percent today. The country’s debt represents 130 percent of GDP. – YaleGlobal