A man checks a monitor with stock exchange data in Milan, Italy, Monday, Dec.10, 2012. Italy's stock market fell sharply and its borrowing costs jumped Monday as investors and European leaders worried over the country's political and financial future following Premier Mario Monti's surprise decision to resign. Monti said Saturday he would resign earlier than expected after Parliament passes the state 2013 budget, saying it was impossible to continue after the political party of former Premier Silvio Berlusconi withdrew its support in two crucial votes last week. (AP Photo/Luca Bruno)
News Summary: Italy elections threaten safety net
Published: 06:38:46 PM, Wed 27 February 2013 UTC
UNINTENDED OUTCOME: Italy's election has spooked global investors because it raises unsettling questions about the availability of the financial safety net that has kept Europe from catastrophe for the past six months.
CUT COSTS OR ELSE: The Italian vote rejecting austerity leaves the country vulnerable if its borrowing costs rise to unmanageable levels. The European Central Bank won't buy unlimited quantities of struggling countries' bonds unless the participants commit to austerity.
NO DANGER YET: So far, Italy's borrowing costs have risen only moderately. But the fear is that continuing turmoil could let them climb toward the heights of late 2011 and early 2012 — a hefty 7 percent.
Tags:
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