Italian election rattles world markets

Beppe Grillo’s Five Star Movement becomes Italy’s election success storyLike Berlusconi in 1994, Grillo has succeeded by exploiting the most relevant medium of the day

World markets retreated Tuesday as a big vote for anti-austerity parties in Italy’s elections left the eurozone’s third biggest economy in political deadlock, sparking fears of a revival of the region’s debt crisis.

European stock markets were sharply lower, led by a 4% plunge on Italy’s index of leading shares. Italy’s borrowing costs increased, as the yield on its 10-year bond moved up towards 5%, triggering similar moves in other weaker eurozone states such as Spain and Portugal. The euro fell to just above $1.30.

“Italy’s election looks set to deliver some of the worst-case outcomes that markets had feared but had largely ruled out as unlikely,” noted Shahab Jalinoos, a strategist at Swiss bank UBS.



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Worden Report
8 years ago

It seems to me that stock markets on both sides of the Atlantic over-reacted to the prospect of gridlock in Italy. I make the case in I argue that an antiquated view of Europe is a factor in the over-reaction. In short, Italian politics don’t matter as much as they did “back in the day.”