Crisis looms as Italy faces polls impasse

The following is an excerpt from a New Zealand Herald article that quotes Finance Professor Jeff Bergstrand about Europe’s fiscal and currency crisis. To read the entire article visit: Crisis looms as Italy faces polls impasse

Country could see weeks of gridlock and even fresh elections.

Politicians and investors are bracing for a revival of Europe’s fiscal and currency crisis and a deepening of euro-scepticism as Italy grapples with forging a stable government after two-day general elections.

After a poll whose low turnout marked voter discontent with a chaotic political system, a centre-left coalition looks poised to take the Lower House of Parliament, while a right-wing party led by former Premier Silvio Berlusconi may take a slender majority in the Senate Upper House.

A third party, the Five Star Movement, led by a comedian turned damn-them-all activist, Beppe Grillo, has grabbed third place, while outgoing Prime Minister Mario Monti’s party has trailed a distant fourth.

If these trends are confirmed officially, Italy could be in for weeks of gridlock, possibly culminating in fresh elections, say analysts.

…

“They just see the austerity, they don’t see the benefits of keeping the interest rates down,” Jeffrey Bergstrand, a professor of finance at the University of Notre Dame in Indiana, told Reuters.

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