The Italian political crisis may be (almost) over (for now).
According to La Stampa, Italy’s populist ruling parties, the 5-Star and the League have reached an agreement, in which the controversial nominee for finance minister Paolo Savona will instead become EU affairs minister, while Giovanni Tria will take the sensitive post of finance minister. Meanwhile, Enzo Moavero-Milanesi will be Foreign Minister.
Bloomberg confirms as much:
- *FIVE STAR, LEAGUE DEAL EXCLUDES BROTHERS OF ITALY: OFFICIAL
The news spiked risk assets in the US…
… while the 2Y ITA-GER spread collapsed by 40 pips in kneejerk response.
And so for all the badmouthing, it appears that the EU’s German budget minister Oettinger, who said that the market will dictate the Italian government, was correct.
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