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Italian politics

"Italian Bonds Slide As Conte Said To Consider New Elections"

American politics are very simple compared to Italian politics. Italian governments typically include a group of political parties. When the coalition falls apart, there usually are new elections, and a new coalition is formed. Since the end of World War II, Italian governments have only lasted, on average, perhaps 15 months.

People tend to fight when there's too little money. Italy has the opposite problem. Europe is giving them a pile of money for Covid, and the coalition partners feuded on how to spend it. One of the political parties dropped out of the coalition. Right now there's a mad scramble to form a new coalition. If this fails, there will be new elections.

The remaining coalition partners say they don't want this, but they aren't doing enough to prevent it. We shall see. If there are new elections, the center right, under Salvini, will probably take charge again.

The article cited says that this political craziness is causing Italian government interest rates to rise. The Italian economy has continuously been as shaky as its governments. Yet Italy pays a lower interest rate on its bonds than the US. This has to tell you something.

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