Will the Italian election on March 4th be another test for Europe and the EURO?

It was not a long time ago, that we‘ve passed through a period of turbulence because of the increasing Euroscepticism and Europe’s populist outbreak. From French elections and Marine Le Pen’s Front National to the German’s AFD party known for its anti-immigration policy, we have settled with the uncertainty they brought and are now headed into another wave.

Italy is known as the most unstable Government because it’s been through many non-committal bodies and had been constantly changing hands. The latest being Matteo Renzi’s resignation registering the 65th government change since 1946.

On the 4th March, Italians will head to the polls in order to choose a new government. It is already known that not one candidate will be able to collect the necessary percentage for the position. And this will stress Europe and its single currency EURO, as the after-election negotiations will run long, and with the worst scenario, a new election date after 6 months.

The main actors of this elections are the “5 Star Movement” populist party, predictions are pointing to a rising percentage of 30%. This is not good for EU relations because the party is promising a referendum for the withdrawal of Italy from EUROZONE.  

The centre right Forza Italia of Silvio Berlusconi the most favourable party for Italy’s EU relations and Italy’s economic Recovery. He is expected to be the biggest player with a 35% wining votes.

Forecast are now pointing to a 38% chance of a NO-COALITION this will temporarily stress the EURO, but it will stabilize because sooner or later a coalition will be formed and it is widely expected to be between the democratic party of Matteo Renzi and the conservative Forza Italia of Silvio Berlusconi.  

On the other hand, a coalition between the 5 Stars Movement and Matteo Renzi will not be seen as favourable for EU relations and economic recovery, this will push the EURO on the down side for a while.   

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