Italy threatens to destabilise entire EU: Markets PANIC amid threat of early election
EUROPEAN shares fell slightly this morning on a concoction of bad news for the eurozone including an early election in Italy and the threat of a hung parliament.
By CHARLIE BUCKLE
Express.co.uk
Tue, May 30, 2017
The pan-European STOXX 600 index was down 0.2 percent by 0855 GMT following three straight days of losses while Italian banks and blue chip shares fell sharply for a second day.
Italian banking shares, already hit over the last two days, were among the losers with UniCredit down 0.9 percent. Among other euro zone bank heavyweights, Deutsche Bank fell 1.6 percent and Spain’s Caixabank dropped 1.4 percent.
The reaction came after Italy’s biggest parties announced they were considering holding an election as early as September.
It is being proposed that Italy take up a proportional representation model similar to that of Germany.
The move will play into the hands of smaller parties, including the right-wing Five Star Movement which currently is neck-a-neck with Matteo Renzi’s party – both at around 30 per cent.
Lawmakers in Italy are due to discuss the first draft of the new law early next month.
“Momentum is building among political leaders and is pushing towards early elections but it will be an uphill battle against the president and parts of the rank-and-file in the parliament,” Giovanni Orsina, a professor of government at Rome’s Luiss-Guido Carli University told Bloomberg in a phone interview.
Markets have not however reacted well to the news amid fears the election will spark a hung parliament and even further instability in the already beleaguered nation.
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