what are the risks for Italy and the new government

The climate of this first phase, which will culminate with the installation of the future centre-right government, could not have been more stormy. First the tumultuous election of the Second Office of State: arrived only thanks to the help – unclaimed – of the opposition. Then the wave of controversy over the new third charge. All of this paints a less than ideal picture of a deeply divided country. Probable prey to financial speculation.

Portrayed by the media and much of the opposition as about to be ruled by a dangerous ruling majority, and about to set the country back seventy years. Not only does this harm Italy’s social cohesion. But it fuels extremism: Extremist groups have littered the streets of Rome, threatening the safety of newly elected – democratically elected – Senate President Ignazio La Russa.

Ignazio La Russa / ANSA / Massimo Percossi

But beyond the socio-political data of our home, even more serious are and will be the damage and the consequences that this climate of tension is likely to produce for our country-system at the international level. In a historic moment when no nation can truly say it is safe. Where even those who have historically always been seen as stable and reliable by the markets – see the disaster of England, and Prime Minister Truss – are now seen in the balance and at risk. Not to mention Italy which has always lived with the sword of Damocles of its very high exposure to debt, in a precarious balance. The fall of the Draghi government – of national unity – and the current climate have experts fearing a possible collapse of the financial system, imminent, to which must be added the global recession at the gates.

Italy and the risks of speculation in globalized finance?

In fact, due to such an uncertain international framework and a 20th century-toned election campaign, the bearish action on Italian government bonds from the 2008 global financial crisis. 10 years that were borrowed by investors to bet on the downside, today they amount to more than 39 billion euros, according to data from S&P Global Market Intelligence. Italy, which has always been easy prey for speculation, faces the exposure of the energy crisis due to its public debt – 25% in the hands of foreign investors.

Image from Pixabay

To which must be added the fact that the ECB has not always been linear with regard to the purchase of government bonds of the most exposed countries. If some parties continue to give the image of a government that will harm Europe, that will not respect international obligations, where are we going? The new British Prime Minister Truss is back with many apologies on his heels following the economic maneuver deemed by the markets as inefficient and counterproductive. All with an unprecedented devaluation of the pound. And with related speculations obvious even to the layman.

Draghi and Mattarella for the defense of our national sovereignty

It is no coincidence that the well-informed President of the Republic Mattarella and outgoing Prime Minister Draghi have chosen their statements with extreme caution in recent weeks. The legitimacy and credibility of the new government is defended where needed by unwanted stiff-legged revenues, like that of France. Who promised to monitor the work of the future executive.

Rome – The President of the Republic Sergio Mattarella with Prime Minister Mario Draghi, today July 21, 2022.
(Photo by Paolo Giandotti – Press and Communication Office of the Presidency of the Republic)

To show little respect not only for the national sovereignty of Italy, but for the expression of the parliamentary majority democratically elected by the Italian people. Speculation is the market’s warning about the choices that Prime Minister Meloni will make: the great risk of anti-system forces in the globalized market.