Published: 08 Nov 2011
Last Updated: 19 Aug 2013
Italy’s national debt is approaching €2tn. Its debt to GDP ratio stands at 120%. Prime Minister Silvio Berlusconi is persona non grata with his EU peers. Move over Greece, there’s a new casualty in town.
Yesterday, rumour had it that Berlusconi, the joke of the eurozone, Mr ‘bunga bunga’ himself, was to step down. Immediately, the markets rallied with a slight recovery on the FTSE and a 2.4% upturn in Italy. But then the Italian PM took to that well known political platform – Facebook – to announce, ‘Rumours of my resignation are groundless’ and Italian bonds began to heat up again.
This morning, he’s still clinging to power, despite this overwhelming – and global – vote of no confidence. Even his Coalition partner Umberto Bossi wants him out. Brenda Kelly, market analyst at CMC Markets, says: ‘The biggest domino in the debt crisis is now teetering and Italian bond yields appear to have a Berlusconi premium built-in as they hit euro era highs and eye the bail-out territory 7% level.’
Italy is now poised to vote on financial policy and the all-important kicker: should Berlusconi stay or should he go. Whatever the outcome, Italy is in for a rough ride; too big to bail out, if it doesn't fix up fast, the euro itself is in peril.
Meanwhile Greece is attempting to appoint a new prime minister. Not the most over-subscribed of jobs at the moment. Economist and former vice president of the European Central BankLucas Papademos is a possible contender according to the Italian press. Greece's permanent representative at the IMF, Panayiotis Roumeliotis , could also be a dark horse in the running. The appointment is a matter of urgency to ensure that the next £8bn tranche of bail-out funds lands safely.
We’ll keep you posted as these situations develop...
Yesterday, rumour had it that Berlusconi, the joke of the eurozone, Mr ‘bunga bunga’ himself, was to step down. Immediately, the markets rallied with a slight recovery on the FTSE and a 2.4% upturn in Italy. But then the Italian PM took to that well known political platform – Facebook – to announce, ‘Rumours of my resignation are groundless’ and Italian bonds began to heat up again.
This morning, he’s still clinging to power, despite this overwhelming – and global – vote of no confidence. Even his Coalition partner Umberto Bossi wants him out. Brenda Kelly, market analyst at CMC Markets, says: ‘The biggest domino in the debt crisis is now teetering and Italian bond yields appear to have a Berlusconi premium built-in as they hit euro era highs and eye the bail-out territory 7% level.’
Italy is now poised to vote on financial policy and the all-important kicker: should Berlusconi stay or should he go. Whatever the outcome, Italy is in for a rough ride; too big to bail out, if it doesn't fix up fast, the euro itself is in peril.
Meanwhile Greece is attempting to appoint a new prime minister. Not the most over-subscribed of jobs at the moment. Economist and former vice president of the European Central BankLucas Papademos is a possible contender according to the Italian press. Greece's permanent representative at the IMF, Panayiotis Roumeliotis , could also be a dark horse in the running. The appointment is a matter of urgency to ensure that the next £8bn tranche of bail-out funds lands safely.
We’ll keep you posted as these situations develop...
