There seems no end to political chaos in Greece and now even in Italy, which lingers over the fate of euro’s health. Italy faces crisis due to high-rise in its debt rates. Markets stay unstable due to political chaos in Italy and Greece and more negative traits are looming over the fate of European Union that will ultimately affect the entire global market too.
Greeks are looking forward to form a new transitional government. In Italy, the political chaos emerged with possibilities of Prime Minister Silvio Berlusconi losing power. This has put investors in doubt over the future market trends as new democratic governments are likely to make changes unfavorable to investors and so they are pulling back their money leading to more financial turmoil.
Interest rates for Italy’s debt have been increased to 6.6 percent reaching its highest so far since the inception of euro. The finance market set itself into fire following the rumors of prime minister’s possible withdrawal from power but he refuted it later.
Greece’s rush to pull itself away from EU to save itself from the depreciating value of euro had ignited a crisis as international leaders severely criticized the decision. The EU threatened to expel Greece and stop providing any aid. This compelled the political parties of the country to make a written commitment and follow European leaders’ demands in order to get the next installment of aid of $11 billion from the EU.