ZCZC
BCN-15
ITALY-POLITICS-STOCKS-DEBT
Italy financial markets plunge on political turmoil
MILAN, May 29, 2018 (BSS/AFP) – The Milan stock exchange plunged more than
three percent Tuesday, while Italy’s 10-year bond yields jumped to over 300
points higher than Germany’s, reflecting investor worry over the prospect of
a fresh eurozone crisis.
Financial markets are nervous as Italy faces the prospect of new elections
as early as September after a nascent populist government collapsed over the
weekend, prolonging almost three months of uncertainty.
At close on Monday, Italy’s 10-year bond yields were 235 points more than
Germany’s, its highest levels since 2013, before surging to over 300 points
Tuesday morning.
Italy was waiting Tuesday for caretaker prime minister and former IMF
economist Carlo Cottarelli to assemble a cabinet lineup for a technocrat
government after a bid for power by populists failed to get off the ground
over the weekend.
President Sergio Mattarella vetoed the populists’ pick for economy
minister, fierce eurosceptic Paolo Savona, throwing the eurozone’s third
largest economy into a fresh crisis.
For Cottarelli to form a government, parliament must endorse his team —
something the nationalist League party and the Five Star Movement who hold a
majority in both houses have staunchly refused to do.
In the absence of a confidence vote Italy could return to the polls as
early as September.
BSS/AFP/SR/1600 HRS