Silvio, no! The message from investors couldn’t have been clearer. Italian stocks and bonds plunged on Dec. 10, and the euro currency neared a two-week low against the dollar, on news that Prime Minister Mario Monti would step aside after his predecessor, Silvio Berlusconi, withdrew support for Monti’s government.
Monti’s decision could lead to elections as early as February, with Berlusconi as a candidate. The vote would likely be preceded by a vigorous campaign by the former prime minister against the austerity and economic-reform measures Monti’s technocratic government has championed. “Italian political stability has been jeopardized once again,” says Giada Giani, an analyst with Citigroup Global Markets (C) in London.