Italy political crisis affects markets

File photo shows people looking at a board outside Milan™s stock exchange.

Political crisis in Italy has affected the country™s stock markets as the eurozone™s third-largest economy continues to grapple with economic woes.

On Monday morning, Italy’s blue chip index, FTSE MIB, slumped more than 2 percent.

The political crisis also caused the 10-year-yield on the market for the government bonds to jump to 4.65 percent on the same day.

The crisis engulfing Italian Prime Minister Enrico Letta™s coalition government is mainly triggered by former Italian Prime Minister Silvio Berlusconi™s center-right People of Freedom (PDL) party.

On Saturday, all Italian ministers from Berlusconi’s party resigned en masse in protest to the government™s order to increase sales tax.

On the same day, Italian President Giorgio Napolitano pointed out that he did not want new polls in the country.

œWe need a parliament that discusses and works, not that breaks up every now and then,” he said in the city of Naples.

The Italian president added, œWe do not need continuous election campaigns, we need continuity of the government’s actions, decisions and its measures to resolve the problems of this country.”

On Sunday, Italian premier said, œWe evaluated a very complicated and complex situation and decided to go before parliament as soon as possible.”

œWe face a dramatic moment and a turning point,” said Letta, adding, œI will ask for the confidence of both the Senate and the Chamber of Deputies…not for three days only to start over again, but to go ahead and pursue our agenda.”

The center-left premier further noted that œIf I do not get it, I will draw my conclusions… I don’t intend to govern at all costs.”

Letta has planned to call a confidence vote in the parliament on Wednesday.

Inconclusive results in February’s election had forced the center-left Democratic Party and PDL into a coalition. Opinion polls suggest that the two traditionally rival parties have roughly equal support among Italian voters.

Napolitano and business leaders have warned that any new election would probably produce another stalemate in Italy as the country is still mired in recession.

Italy struggles to manage a two-year-long recession, a two-trillion-euro (USD 2.7-trillion) public debt as well as a youth unemployment rate of around 40 percent.


Copyright: Press TV