A Primer on the Political Turmoil in Italy

by Marilou Moursund on May 30, 2018

in currencies,Foreign Markets,Geopolitical

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.

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