It wouldn’t be summer without political turmoil in Europe. The Dow fell 400 points yesterday on concerns about Italian debt after the Italian president blocked a coalition government from forming. The New York Times has a good article explaining what is going on in Italy. From the linked article:
The two parties that won the March 4 elections, the Five Star Movement and the League, have expressed hostility toward rules that govern the 28-nation European Union and the 19 members that have adopted the euro.
The parties joined forces to form a government. But on Sunday, President Sergio Mattarella of Italy objected to their choice of economics minister, Paolo Savona, who was a co-author of a guide to leaving the eurozone. Mr. Mattarella argued that there should be more public debate if Italy were to seriously consider abandoning the euro. The attempt to form a government collapsed, and new elections are now likely.
Though both parties now say that leaving the euro was never on their agendas, they both have a record of flirting with an exit. And it is likely that the next elections, which could be as early as this summer, will amount to a referendum not only on the euro but also on Italy’s membership in the European Union.
