All of Europe is down today, but Italy is taking the worst of it.
The benchmark FTSE MIB stock index is down 1.65%.
So what’s going on?
Ominous comments from Silvio Berlusconi may have something to do with it.
Smarting over his recent conviction and 4-year prison sentence, he’s lashing out at the government, and made ominous hints at throwing his political might around again.
In a hastily called news conference he attacked the magistrates who convicted him as part of a caste of leftist “dictators” a vitriolic charge he has leveled many times before.
But then he trained his sights on Prime Minister Mario Monti’s economic policies.
“We have to recognise the fact that the initiative of this government is a continuation of a spiral of recession for our economy. Together with my collaborators we will decide in the next few days whether it is better to immediately withdraw our confidence in this government or keep it, given the elections that are scheduled,” he said.
Needless to say, any new election or Berlusconi re-entry into politics would be very worrisome to the rest of Europe, as Monti (despite the weak economy) has been good at playing politics, and getting Italian borrowing costs down.