The specter of a financial crisis came back to haunt Italy on Tuesday, as its markets plunged on fears that the eurozone’s third-largest economy is heading toward another election that could shape up to be a referendum on whether to stay in the common currency.
Premier-designate Carlo Cottarelli, a former IMF official, was expected to submit his list of ministers to President Sergio Mattarella in Rome, two days after an attempt by two populist parties to form a government foundered on the president’s rejection of their anti-euro economy minister.
Enraged at losing their chance at governing following inconclusive elections in March, both the anti-establishment 5-Star Movement and the anti-euro league vowed with other parties to vote against a Cottarelli Government when it faces a vote of confidence in parliament, expected later this week.
That would force Italy to new elections in the fall, with Cottarelli heading an interim, caretaker Government.