In a surprising and unprecedented move Italian President Giorgio Napolitano was re-elected after the nations divided political party’s appealed for him to run after they couldn’t decide on a new candidate and as they desperately seek an end to Italy’s growing political crisis.
As a result of the 87-year olds re-election the financial markets perked up as hopes that Napolitano will now take decisive action to get politicians to finally form a government. Napolitano’s re-election was mad possible due to a broad agreement between traditional political groups on the right and left.
Italy has been without a government since February when national elections split the parliament between the centre-left, centre-right and the anti-establishment Five-star movement. For a government to be formed requires at least two of the groups to form an alliance in order to gain a majority, something that appears impossible as things currently stand.
Napolitano can now ask a political leader to form a government, something that he unable to do at the end of his previous term. Now thanks to his re-election he has renewed powers and can force the issue through. It is expected that the president would rather force through a new government rather than see Italy return to the polls. At the moment the most likely choice would be to create a coalition government comprised of the country’s left and right parties.
The re-election was slammed by the Five-star movement however with its firebrand leader Beppe Grillio describing it as a desperate attempt to retain power by the discredited elite. Five-star supporters stage a rally in Rome to protest the vote.
With Italian politicians so divided the President faces a very difficult task and we can expect the Italian political crisis to drag on for a few more days at least. However with some headway being made the Euro strengthened against some of its peers but has weakened against the US Dollar and British Pound due to data showing that the Eurozone regions budget deficit increased by -3.7% and as Eurozone debt hit 90% of GDP.
As of 11:20 am GMT
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8561
The Euro to US Dollar exchange rate is currently trading in the region of 1.3046
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2699
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5486