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Italy's political storm rocks markets

Monday, December 10, 2012 - 02:02

Dec.10 - European markets slipped while Italian bond prices also fell after Italian Prime Minister Mario Monti's decision to resign deepens euro zone uncertainty. Ciara Sutton reports.

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When it rains it pours - and Italy's political storm is being felt across Europe. Markets fell, the euro hit a two-week low, and yields pushed higher at the prospect of Prime Minister Mario Monti's resigning early next year. The possible return of the disgraced former PM Silvio Berlusconi didn't help either. (SOUNDBITE) (ITALIAN) FORMER ITALIAN PRIME MINISTER, SILVIO BERLUSCONI, SAYING: "I've never entered a race, be it when I was doing sports, working or studying with the intention of just reaching a good ranking. When I enter a race, I do it to win." The 76-year-old billionaire resigned in 2011 as Italy teetered on the edge of a Greek-style debt crisis. And he's still fighting criminal charges in relation to fraud and sex-scandals - one involving an underage prostitute. (SOUNDBITE) (Italian) MARKET STALL ATTENDANT SONIA PROIETTA, SAYING: "We Italians need to worry, not because of the current crisis which is serious but because this idiot is around. I hope he gets a good smash in the face and then arriverderci he can go back to the Caymen islands" Investors too fear an Italy with Berlusconi at the helm says Christian Shultz, Senior Economist at Berenberg Bank . (SOUNDBITE) (English) BERENBERG BANK, CHRISTIAN SHULTZ, SAYING: "Italy may still rely on a bailout, they may still require a bailout at some point. That may mean that they have to fulfil conditions. If the Germans do not trust Italian politicians and there is every reason to believe that they won't, then these conditions might be quite tough which may mean that Italy's recession may take a little longer." Europe's third largest economy has been in a deep recession for over a year. Unemployment is at record highs and consumer spending has collapsed. Many blame Monti's taxes for making things worse. But the technocrat's actions have gone down well with investors and euro zone leaders. He won't be standing down until he's passed a budget and a new financial stability law. And many are hoping he will a still have a key role in government whoever becomes the new leader.

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Italy's political storm rocks markets

Monday, December 10, 2012 - 02:02