So, Italian Prime Minister Renzi didn’t get to resign as he had planned to on Monday. Instead he’s been asked to stay on until after the Budget vote. This isn’t really significant for markets, he will go, we just don’t know when at this stage. After that it is likely that a coalition of centre-left and centre-right will come together to form a temporary government in an attempt to block the radical Five Star Movement from power. Of far more importance on Tuesday is the fate of Italy’s banks. Monte dei Paschi, the world’s oldest bank managed to swap over EUR 1bn of bonds into equity yesterday.
What's going on in Italy?
The Italians went to the polls on Sunday and voted – NO! Italy rejects Renzi...... Now to be clear - Italians did not vote for internal change, because if they did they would have voted YES, in fact the NO vote keeps the status quo which leaves the present constitution and political establishment in much the same place for now......What it did do though is give re-birth to the FAR RIGHT - The 5 Star Movement Party - led by Beppe Grillo - a party that is Anti Establishment -anti- EU, anti immigration and anti Euro...Now what is interesting though is that 63% of Italians do NOT want to exit the EU....They are not rejecting the common currency etc.....but they did not want to cede power to the PM.