Political instability in Italy has dented confidence across the European landscape today, helping to knock 1% from Italy’s FTSE MIB index, as the Silvio Berlusconi effect once more causes problems.
Focus is also faling back on to Greece ahead of further anticipated bailouts. The country’s inability to successfully tackle its budget and GDP has not gone unnoticed, and Angela Merkel’s remit following re-election will not allow her to be too relaxed in handling Greek austerity issues.
Over the Atlantic things are not much better, and putting aside the on/off debate about tapering, the looming US debt ceiling deadline is becoming more of an issue. President Obama has not exactly enhanced his legacy with an inability to successfully steer the previous two deadlines. The ensuing erosion of the US government’s credibility, though not an immediate fear, will have done little for the nation’s future debt rating.