Italy's benchmark index, the FTSE Mib, closed 3.5pc down amid worries that political jostling in Rome threatens the country's fiscal stability. France's CAC 40 Index also suffered, dropping 1.6pc, and Germany's DAX lost 0.9pc. In Spain, the Ibex fell 2.6pc, while Portugal's PSI 20 ended 1.3pc lower. The flight from Italian government debt saw the yield, or return, on its 10-year bonds touch 5.3pc, a euro-era high. Mike Riddell, a fund manager at M&G, described the situation as a "bloodbath". "Whatever your view is or was [of Italy's finances], the reality now is that those pesky bond vigilantes have caught sight of Italy, and that is basically all that matters," he said. Investors are worried that Giulio Tremonti, Italy's finance minister, is threatened by corruption accusations against a former aide and seems to have lost the support of his prime minister Silvio Berlusconi. "He thinks he's a genius and that everyone else is stupid," Mr Berlusconi said yesterday. The fear is that if Mr Tremonti is forced out of government it could derail the austerity measures he has pushed through to bring down Italy's huge debt, which amounts to around 120pc of its GDP. That would leave Italy in greater danger of being sucked into the turmoil which overtook Greece and Portugal, as doubts about their finances saw them shut out of the international debt markets. Mario Draghi, Italy's top central banker and the next president of the European Central Bank, tried to offer reassurance with a statement backing Rome's austerity measures as "credible". 
Access Investments-Building Awareness - European Union-ROMANIA
Saturday, July 9, 2011
Italy's benchmark index, the FTSE Mib, closed 3.5pc down amid worries that political jostling in Rome threatens the country's fiscal stability. France's CAC 40 Index also suffered, dropping 1.6pc, and Germany's DAX lost 0.9pc. In Spain, the Ibex fell 2.6pc, while Portugal's PSI 20 ended 1.3pc lower. The flight from Italian government debt saw the yield, or return, on its 10-year bonds touch 5.3pc, a euro-era high. Mike Riddell, a fund manager at M&G, described the situation as a "bloodbath". "Whatever your view is or was [of Italy's finances], the reality now is that those pesky bond vigilantes have caught sight of Italy, and that is basically all that matters," he said. Investors are worried that Giulio Tremonti, Italy's finance minister, is threatened by corruption accusations against a former aide and seems to have lost the support of his prime minister Silvio Berlusconi. "He thinks he's a genius and that everyone else is stupid," Mr Berlusconi said yesterday. The fear is that if Mr Tremonti is forced out of government it could derail the austerity measures he has pushed through to bring down Italy's huge debt, which amounts to around 120pc of its GDP. That would leave Italy in greater danger of being sucked into the turmoil which overtook Greece and Portugal, as doubts about their finances saw them shut out of the international debt markets. Mario Draghi, Italy's top central banker and the next president of the European Central Bank, tried to offer reassurance with a statement backing Rome's austerity measures as "credible". 
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