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

Multimedia VOA SPECIAL REPORT: US Army Turns Its Best Minds Toward Ebola

Scientists at America's premier biological research center race to find effective drugs, speedier tests and a safe vaccine amid the deadliest outbreak of Ebola in history More

Kurdish Poet Battles to Defend Language, Culture

Kawa Nemir's work is an example of what he sees as an irreversible cultural and political assertiveness among Kurds in Turkey More

Dissident Venezuelan General Resurfaces in New York

Antonio Rivero has resurfaced after nearly a year in hiding, appearing at United Nations in New York 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.
Filmmakers Produce Hand-Painted Documentary on Van Goghi
X
George Putic
January 29, 2015 9:43 PM
The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Crowded Republican Presidential Field Off to Early Start for 2016

It seems early, but the 2016 U.S. presidential election campaign is already heating up. Though no one has officially announced a candidacy, several potential Republican contenders have been busy speaking to conservative groups about making a White House run next year. Many of the possible contenders are critical of the Obama administration’s foreign policy record. VOA national correspondent Jim Malone reports.

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

All About America

AppleAndroid