Italian politics jump one hurdle but we’re far from near the end of this race
This weekend, Italian parties fighting to get into power managed to come together to agree Presidents for both the Upper and Lower Houses. 5-Star’s Roberto Fico will take the Lower House, while Forza’s Elisabetta Casellati will take the Upper. 5-Star and the League opposed Forza’s choice but hasty negotiations settled that.
That may have been of some comfort to the Euro today but it’s what’s also happening behind the scenes that could be more worrying. The favoured coalition is expected to be between 5-Star and Berlusconi’s Forza. However, sources in Italy have noted that 5-Star and the Northern League have been getting more pally and that raises the chances that both of them looking to try and form a coalition, leaving Forza out in the cold. From a market perspective, that’s something that was unthinkable and an outcome vastly written off before the elections but it’s apparently a bigger possibility than before. If we see stories coming out that 5-Star and the Northern League might look at a coalition, that will likely catch the market on the hop and the Euro could suffer.
Italy being Italy, anything can happen, and the day to day noise from their politics is way down on the market’s list of concerns, for now. It won’t take much to send them higher up the list though.
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