The graph that you are seeing above this article shows the Italian bond market spread, which could be translated as a sort of fear-gauge or a ‘Richter scale of stress’ if you will.
The events of the past 24 hours (see our related coverage) have made sure that international investors are fleeing the country and the bond market saw its highest jump since the creation of the Euro as many fear the country is doomed and an exit from the Euro-zone will now become a possibility.
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Bond traders are starting to price in the possibility of Italy leaving the euro zone. <a href="https://t.co/JvC3eRWzwO">https://t.co/JvC3eRWzwO</a> The rise in 2-year Italian yields has been swift and fierce. <a href="https://t.co/8CGUyrCF4x">pic.twitter.com/8CGUyrCF4x</a></p>— Lisa Abramowicz (@lisaabramowicz1) <a href="https://twitter.com/lisaabramowicz1/status/1001403154964123648?ref_src=twsrc%5Etfw">May 29, 2018</a></blockquote>
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Spain and Greece are also suffering as a result. Italy, with a current debt of 130% of GDP, will have to undergo severe cuts if it wants to remain in the Eurozone, something the populist parties (who won the elections) wish to avoid.
Given that the current technocratic Prime Minister Mr Carlo Cottarelli, an Ex-IMF Director assigned by the country’s President with the blessing of both Germany and France needs to pass a confidence vote in parliament where the populists have a majority, there seems to be no direct solution from the impasse.
Related coverage: https://thegoldwater.com/news/27432-Italy-Populists-Outraged-As-President-Assigns-Technocrat-PM-Bypassing-Election-Result
In a very rare and outspoken comment, the governor of the Bank of Italy, Mr Ignacio Visco, warned that Italy was “a few short steps away” from losing the “asset of trust.”
“The rules of the game can be debated, even criticised; they can surely be improved,”
“Yet, we cannot disregard constitutional constraints: protecting savings, balancing the accounts and respecting the treaties.”
The sell-off of Italian assets, which makes it even harder for politicians to get out of the current mess, only aggregated the already existing tension between the European Commission in Brussels and the populist Italian parties who are furious over President Sergio Mattarella refusal to accept their government.
Related coverage: http://thegoldwater.com/news/27312-Italy-President-Faces-Impeachment-New-PM-Refuses-To-Form-Government
Mr Matteo Salvini, the leader of the Lega Nord, claimed: “This is insane, they are shameless in Brussels.”
Meanwhile Mr Donald Tusk, president of the European Council, tried to appeal to the populists in Italy, saying: “Please respect the voters. We are there to serve them, not to lecture them.”
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">A clear signal of German interference (and France) in our home affair! Mr <a href="https://twitter.com/hashtag/Oettinger?src=hash&ref_src=twsrc%5Etfw">#Oettinger</a> put his horrible nose in his <a href="https://twitter.com/hashtag/Deutchbank?src=hash&ref_src=twsrc%5Etfw">#Deutchbank</a> near Bankrupt ! <a href="https://t.co/xpR4cWwbJC">pic.twitter.com/xpR4cWwbJC</a></p>— Nico (@nicofornara) <a href="https://twitter.com/nicofornara/status/1001439056251834368?ref_src=twsrc%5Etfw">May 29, 2018</a></blockquote>
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His reaction came after an interview with EU Commissioner Dr Oettinger who stated: “The markets will teach the Italians to vote for the right thing.”
Source:
Twitter: #Oettinger #Italy #EU #QAnon #MAGA #FelizMartes
Fuck the EU and fuck anybody who supports those pieces of human trash