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27 Feb 2013
Forex Flash: Europe tastes the bitterness of austerity – Deutsche Bank
Mr. Monti was put in place as a democratic outcome was seen as unlikely to yield the policies designed to keep Italy within the Euro, however many believe his policies have helped cause one of the worst recessions in living memory in Italy and it's not a surprise to see the voter rebellion.
According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Europe needs to take this rebellion very seriously and maybe think about its policies going forward. If it wants to keep the Euro as a going concern over the years ahead it may need to find a way of easing off on austerity whilst simultaneously finding a way for the ECB to be distributing more non-conditional liquidity.”
Our European economists write that with no workable majority in the Senate, the most likely outcome now is a "caretaker government" which - at best - will come up with a new electoral system. As it currently stands though, the centre-left's Bersani has indicated that he will at least try to form a government, but without mention as to which political groups he will reach out to.
According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Europe needs to take this rebellion very seriously and maybe think about its policies going forward. If it wants to keep the Euro as a going concern over the years ahead it may need to find a way of easing off on austerity whilst simultaneously finding a way for the ECB to be distributing more non-conditional liquidity.”
Our European economists write that with no workable majority in the Senate, the most likely outcome now is a "caretaker government" which - at best - will come up with a new electoral system. As it currently stands though, the centre-left's Bersani has indicated that he will at least try to form a government, but without mention as to which political groups he will reach out to.