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L'IMPATTO DEL RITORNO DI BERLUSCONI SUI MERCATI. L'analisi di Eimear Daly, FX Market Analyst Monex Europe

13 Dicembre 2012 - Autore: Redazione

It is astonishing how much impact one man can have. Berlusconi’s PdL party’s refusal to support Mario Monti’s government forced the resignation of the current technocrat prime minister. Monti will now resign after the 2013 Budget has passed through parliament but will leave a slew of important economic reform legislation abandoned. The markets reaction to the prospect of a Berlusconi comeback says it all. Italy’s major FTSE MIB Index lost 0.5% in trading yesterday. Ten year yield levels jumped 30bps after falling steadily since mid August. A yield level of 4.820% is however some 250 basis points below levels leading up to Berlusconi’s resignation in November 2011. Credit Default Swaps, an insurance premium against an Italian default, also rose to 291.93 basis points. During Berlusconi’s term in power, the instruments reached a high of 594.65. Italy has come a long way since the days of Berlusconi’s reign. Hopefully the Italian electorate sees this as much as the markets.

The good news is that Berlusonci’s PdL party currently lags in opinion polls, with the left of centre Democratic Party taking around 30% of the vote. The anti-establishment Five Star Movement, a more radical version of Greece’s Syriza party, is also gaining in popularity. This will likely unsettle markets further. Rumours circulated this morning that current PM Monti is in talks with centrist politician to enter the election campaign. If Monti stood and won, the result of this political fiasco would actually be an improvement in Italy’s outlook. A strong democratic mandate is the best tool to implement successful austerity. This has already been proved by the good example of Ireland, where a strong political mandate implemented reforms and brought the country back to growth. The bad example is Greece whose fractious parliament couldn’t agree on reforms which were thus never implemented. Even if the Democratic Party wins without Mario Monti, democratic legitimacy could help bring Italy back to growth.


Eimear Daly


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