X

Create an account to continue reading.

Registered readers have access to our blogs and a limited number of magazine articles
For unlimited access to The Spectator, subscribe below

Registered readers have access to our blogs and a limited number of magazine articles

Sign in to continue

Already have an account?

What's my subscriber number?

Subscribe now from £1 a week

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
 
View subscription offers

Already a subscriber?

or

Subscribe now for unlimited access

ALL FROM JUST £1 A WEEK

View subscription offers

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Login

Don't have an account? Sign up
X

Subscription expired

Your subscription has expired. Please go to My Account to renew it or view subscription offers.

X

Forgot Password

Please check your email

If the email address you entered is associated with a web account on our system, you will receive an email from us with instructions for resetting your password.

If you don't receive this email, please check your junk mail folder.

X

It's time to subscribe.

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access – from just £1 a week

You've read all your free Spectator magazine articles for this month.

Subscribe now for unlimited access

Online

Unlimited access to The Spectator including the full archive from 1828

Print

Weekly delivery of the magazine

App

Phone & tablet edition of the magazine

Spectator Club

Subscriber-only offers, events and discounts
X

Sign up

What's my subscriber number? Already have an account?

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating your account – To update your details click here to manage your account

Thank you for creating an account – Your subscriber number was not recognised though. To link your subscription visit the My Account page

Thank you for creating your account – To update your details click here to manage your account

X

Your subscriber number is the 8 digit number printed above your name on the address sheet sent with your magazine each week. If you receive it, you’ll also find your subscriber number at the top of our weekly highlights email.

Entering your subscriber number will enable full access to all magazine articles on the site.

If you cannot find your subscriber number then please contact us on customerhelp@subscriptions.spectator.co.uk or call 0330 333 0050. If you’ve only just subscribed, you may not yet have been issued with a subscriber number. In this case you can use the temporary web ID number, included in your email order confirmation.

You can create an account in the meantime and link your subscription at a later time. Simply visit the My Account page, enter your subscriber number in the relevant field and click 'submit changes'.

If you have any difficulties creating an account or logging in please take a look at our FAQs page.

Coffee House

Italian elections: ‘The worst possible outcome’

26 February 2013

3:16 PM

26 February 2013

3:16 PM

Forget Moody’s. If you want to see market panic, just look at Italy. As Isabel reported this morning, the unexpectedly strong performance of Beppe Grillo’s anti-establishment party, the Five Star Movement, has produced an extremely close election result, and no clear winner.

While the electoral system guarantees a majority in the Chamber of Deputies for the group with the largest vote share (Pier Luigi Bersani’s centre-left group), it does not do so for the Senate. With no group securing a majority in the upper house, Italy now faces coalition negotiations and likely another election.

Citi calls this ‘probably the worst possible outcome for Italy’ — thanks to the political uncertainty, the ‘anti-austerity message being conveyed by voters’ and the ‘absence of a cohesive and credible political leadership’. And the markets seem to agree. The Italian stock exchange has fallen by 6.7 per cent since yesterday afternoon, and the euro is down by around 2 cents against the dollar, from $1.33 to $1.31. The yield on ten-year government bonds has risen by 0.32 points, from 4.49 per cent at close yesterday to 4.81 now – though it’s still nowhere near the 7.4 per cent high seen when Berlusconi resigned in November 2011.

[Alt-Text]


Unlike the UK, Italy’s economic problems do not include a particularly big deficit:

Indeed, the Italians have eliminated their structural deficit, something the UK won’t achieve until 2018 at the earliest:

Instead, Italy’s problems are a very weak economy and high government debt. It’s GDP is now 7.7 per cent below its pre-recession peak, and is expected to continue to fall this year:

And whereas the UK entered the recession with government debt below 40 per cent of GDP, Italy’s was already around 90 per cent, and now stands at about 100 per cent:

If the Italians are to tackle that debt burden, they’re going to need to press on with the austerity programme they’ve shown such hostility towards in these elections.

Give something clever this Christmas – a year’s subscription to The Spectator for just £75. And we’ll give you a free bottle of champagne. Click here.


Show comments
Close