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1 Oct 2013
Flash: Euro behaves as if Italian PM will continue in government - ANZ
FXstreet.com (Barcelona) - In Italy, no further light will be shed until Wednesday's confidence vote, yet, according to Brian Martin, Strategist at ANZ, the euro is trading in a way that suggests PM Letta may be able to continue in government."
Key Quotes
"The best outcome for markets in coming months would be a continuation of the Letta administration (without Berlusconi) that could introduce electoral reform and get the 2014 budget passed. That would curtail and reduce tails risks. Conversely, the opposite is true. Italy must be mindful of the rating agencies and the impact that political indecision can have on its cost of borrowing."
" The need for electoral reform in Italy is urgent given the fragmented nature of its political system. In the lower house, if the largest party fails to get 55% of the vote, it is awarded bonus seats so that its number of seats is increased to 340, guaranteeing it a working majority. The lower house has 630 seats. That is not the case in the senate and, as both chambers have identical functions, it makes governing very difficult. There are a total of 315 seats in the Senate and 158 are needed to have a majority."
Key Quotes
"The best outcome for markets in coming months would be a continuation of the Letta administration (without Berlusconi) that could introduce electoral reform and get the 2014 budget passed. That would curtail and reduce tails risks. Conversely, the opposite is true. Italy must be mindful of the rating agencies and the impact that political indecision can have on its cost of borrowing."
" The need for electoral reform in Italy is urgent given the fragmented nature of its political system. In the lower house, if the largest party fails to get 55% of the vote, it is awarded bonus seats so that its number of seats is increased to 340, guaranteeing it a working majority. The lower house has 630 seats. That is not the case in the senate and, as both chambers have identical functions, it makes governing very difficult. There are a total of 315 seats in the Senate and 158 are needed to have a majority."