Wainwright Marks Management - Italy Considers Departure from Euro Zone
October 09, 2018 Politics News(PRLEAP.COM) Italy's government has caused additional market uncertainty after comments that the country would be in a better position if it were not a part of the euro zone.
The market turmoil came after head of Italy's ruling party, Claudio Borghi, stated that Italy would be able to overcome most of its problems if it had its own currency.
Wainwright Marks Management analysts say Borghi's comments, made on a national radio station, caused the yield on Italy's 10 year bond to increase to its highest point in more than 4 years. Italy's main index also dropped by 1.5 percent as Italian shares plunged.
Italy's new populist government has been in the spotlight as it puts together its first budget.
"There is widespread concern that elevated consumer spending could have a negative impact on the reduction of public debt," says Andrew Miles, Head of Corporate Equity at Wainwright Marks Management.
Italy's public debt currently sits at around $2.6 trillion.
Italy's ruling party has made similar comments regarding Italy's membership of the European Union in the past but reined in its comments on the controversial topic shortly before the election in March this year.
As market turmoil escalated after Borghi's comments, a spokesperson for the ruling party released a statement saying that exiting the euro zone is not on the government's agenda.
Wainwright Marks Management analysts say that Italy's government is already under scrutiny as markets await the details of its budget plan for next year. The Italian government has until the middle of this month to submit its spending plans for next year to the European Commission for analysis and approval.