Italy To Once Again Suffer From Political Crisis

Forex News

Italy is seemed to be entering another phase of political ambiguity. The center-right coalition of former Prime Minister Silvio Berlusconi is most likely to win. It will take a lot of time to form a government if he eventually does. Lorenzo Codogno (a former chief economist at the Italian Treasury) stated: "Italy is far from having sorted its long-standing problems, and now it will have new ones. Be prepared for long and complex negotiations that will take months”.

The coalition will probably be a very radical one, that will try to break the EU budget restrictions or even call a snap election. 5-Star Movement, led by Luigi Di Maio, will definitely have an important seat in any of potential coalitions. Riccardo Fraccaro (senior party member) claimed: "Nobody will be able to govern without the 5-Star Movement". The majority’s view is drastically different as the front page headline on the first edition of La Stampa newspaper exclaims: "Di Maio wins, Italy ungovernable". Parliament will meet for the first time on March 23 and Sergio Mattarella (Italy’s President) will open formal negotiation on forming a government somewhere in April.

Final results are yet to be announced, thus euro is holding its ground. Plus, the currency is buoyed by the fact that members of the Social Democratic Party voted in favor of the coalition with Christian Democratic Union/Christian Social Union in Germany.