News / Europe

Markets Calming as Italy Approaches Unity Government

Former EU Competition Commissioner, economist Mario Monti (file photo)
Former EU Competition Commissioner, economist Mario Monti (file photo)
Henry Ridgwell

Italy's Senate rushed to pass laws that clear the way for establishing a new government in a bid to restore confidence in Europe’s second-biggest debtor.  The new administration may be led by former EU Competition Commissioner Mario Monti, - a man markets appear to trust.

This morning’s headline on Italy’s leading financial newspaper, Il Sore 24 Ore, read simply ‘Hurry Up.’

With Italy in the eye of Europe’s financial storm, investors want a quick solution. So indications that Prime Minister Berlusconi may step aside within days and give his backing to a national unity government, was a rare piece of good news for the markets, which reversed their two-day losing streak.

Economist Nicola Borri of the International University of Social Studies in Rome, says Italy’s politicians need to act fast.

“First thing is, we need to implement the structural reforms that will be able to increase the growth rate of our economy," said Borri. "Our problem is a long term problem - the fact that we are not growing, and if we do not grow we are not going to be able in the future to pay our debt, and that is what markets fear.”

Italy’s 10-year bond yields, effectively the interest rate the country must pay on loans, stabilized around seven percent, still barely sustainable.

Rome also paid less to sell one-year treasury bills than many had predicted. The markets’ short-term fear, says Borri, is political instability.

“Right now our political arena is crazy," he said. "We all know that Berlusconi has ‘almost’ resigned, we do not know what is going to happen after, if we are going to have elections, if we are going to have a grand coalition government, so we need more clarity on that.”

One man has emerged who might lead such a coalition government, former European Union Competition Commissioner Mario Monti - the current favorite to take over as a so-called ‘technocrat’ leader to steer Italy into calmer waters.

Analyst Nicola Borri says Monti is a respected economist who should have a calming effect.

“Markets know what he has in mind," said Borri. "He has in mind I would say two or three big reforms that I would say most economists agree Italy desperately needs, but it seems neither the left nor the center-left nor the right or the center-right are able to implement.”

Analysts say that political deadlock will have to be loosened for Italy’s long-term stability.
Silvio Berlusconi retains considerable support for both his style of governance and character.

“Berlusconi is the captain if the ship and the left party wants to sink the ship," said Alessandro Stuart, assistant to the head of the Rome cabinet which is led by Berlusconi’s party. "What they do not realize is that we are all on the same ship because they have never worked like us normal people.  Without a captain like Berlusconi Italy cannot move forward.”

But with Berlusconi already vowing to step down, analysts say Italy must act quickly to appoint a successor if the country is to be saved from Europe’s debt storm.

You May Like

Video Positive Messaging Helps Revamp Ethiopia's Image

In country once connected with war, poverty, famine, headlines now focus on fast-growing economy, diplomatic reputation More

Russian Activist Thinks Kremlin Ordered Nemtsov's Death

Alexei Navalny says comments of Russian liberals who think government wasn't involved are 'nonsense.' More

Video Land Disputes Rise Amid Uganda Oil Boom

Investors appear to be cashing in by selling parcels of land to multiple buyers More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Spacecraft Approaches a Dwarf Planeti
X
George Putic
March 04, 2015 8:51 PM
NASA’s Dawn spacecraft will make history on Friday, March 6, when it becomes the first man-made object to orbit a dwarf planet named Ceres. It is located in the asteroid belt between Mars and Jupiter, almost 500 million kilometers from Earth. Among other objectives, Dawn will try to examine two mysterious bright white spots detected on the planet’s surface. VOA’s George Putic has more.
Video

Video NASA Spacecraft Approaches a Dwarf Planet

NASA’s Dawn spacecraft will make history on Friday, March 6, when it becomes the first man-made object to orbit a dwarf planet named Ceres. It is located in the asteroid belt between Mars and Jupiter, almost 500 million kilometers from Earth. Among other objectives, Dawn will try to examine two mysterious bright white spots detected on the planet’s surface. VOA’s George Putic has more.
Video

Video Young Muslims Radicalized Online

Young Muslims are being radicalized ‘in their bedrooms’ through direct contact with Islamic State or ISIL fighters via the Internet, according to terror experts. There are growing concerns that authorities and Internet providers are not doing enough to counter online extremism - which analysts say is spread by a prolific network of online supporters around the world. Henry Ridgwell reports from London.
Video

Video African Americans Recall 1960's Fight For Voting Rights

U.S. President Barack Obama and thousands of people will gather in the small southern U.S. city of Selma, Alabama, Saturday, March 7th to commemorate the 50th anniversary of a historic voting rights march that became known as “Bloody Sunday." VOA’s Chris Simkins traveled to Alabama and introduces us to some of the foot soldiers of the voting rights struggles of the 1960’s.
Video

Video Positive Messaging Transforms Ethiopia's Image

Ethiopia was once known for famine and droughts. Now, headlines more often point to its fast-growing economy and its emergence as a regional peacemaker. How has Addis Ababa changed the narrative? VOA's Marthe van der Wolf reports.
Video

Video Cyber War Rages Between Iran, US

A newly published report indicates Iran and the United States have increased their cyber attacks on each other, even as their top diplomats are working toward an agreement to guarantee Iran does not develop a nuclear weapon and to free Iran from international sanctions. The development is part of a growing global trend. VOA’s Al Pessin reports from London.
Video

Video Answers Elude Families of MH370 Passengers

For the families on board Malaysia Airlines flight MH370, an airline official’s statement nearly one year ago that the plane had lost contact with air traffic control at 2:40 AM is the only thing that remains confirmed. William Ide reports.
Video

Video Land Disputes Arise Amid Uganda Oil Boom

Ugandan police say there has been a sharp increase in land disputes, with 10 new cases being reported each day. The claims come amid an oil boom as investors appear to be cashing in by selling parcels of land to multiple buyers. Meanwhile, the people who have been living on the land for decades are chased away, sometimes with a heavy hand. VOA's Serginho Roosblad reports.
Video

Video In Russia, Many Doubt Opposition Leader's Killer Will Be Found

The funeral has been held in Moscow for Boris Nemtsov, the opposition leader who was assassinated late Friday just meters from the Kremlin. Nemtsov joins a growing list of outspoken critics of Russia under the leadership of President Vladimir Putin who are believed to have been murdered for their work. VOA’s Daniel Schearf reports from Moscow.
Video

Video Simulated Astronauts Get Taste of Mars, in Hawaii

For generations, people have dreamed of traveling to Mars to explore Earth's closest planetary neighbor. VOA's Mike O'Sullivan reports that while space agencies like NASA are planning manned missions to the planet, some volunteers in Hawaii are learning how humans will cope with months in isolation on a Mars base.
Video

Video Destruction of Iraq Artifacts Shocks Archaeologists

The city of Mosul was once one of the most culturally rich and religiously diverse cities in Iraq. That tradition is under attack by members of the Islamic State who have made Mosul their capital city. The Mosul Museum is the latest target of the group’s campaign of terror and destruction, and is of grave concern to archaeologists around the world. VOA’s Kane Farabaugh reports.
Video

Video Smartphones May Help in Diagnosing HIV

Diagnosing infections such as HIV requires expensive clinical tests, making the procedure too costly for many poor patients or those living in remote areas. But a new technology called lab-on-a-chip may make the tests more accessible to many. VOA’s George Putic reports.
Video

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials have expressed concern over reports of a crackdown on Afghan refugees in Pakistan following the Peshawar school attack in December. Reports of mass arrests and police harassment coupled with fear of an uncertain future are making life difficult for a population that fled its homeland to escape war. VOA’s Ayesha Tanzeem reports from Islamabad.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More