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Italy's political crisis hits the financial markets | Italy's political crisis hits the financial markets |
(34 minutes later) | |
The financial markets have been rattled by Italy's deepening political crisis. | The financial markets have been rattled by Italy's deepening political crisis. |
Italian shares fell more than 2% and the euro fell to the lowest level since June against the Swiss Franc. | |
Italy's 10-year bond yield - an indication of how much the government has to pay to borrow money - rose as high as 4.66%, the highest level in more than 3 months. | Italy's 10-year bond yield - an indication of how much the government has to pay to borrow money - rose as high as 4.66%, the highest level in more than 3 months. |
Prime Minister Enrico Letta plans to hold a confidence vote on Wednesday, to seek the backing of Italy's parliament. | Prime Minister Enrico Letta plans to hold a confidence vote on Wednesday, to seek the backing of Italy's parliament. |
He was forced to make that move after five ministers from Silvio Berlusconi's party stepped down at the weekend. | He was forced to make that move after five ministers from Silvio Berlusconi's party stepped down at the weekend. |
But those ministers have now given mixed signals as to whether they are actually leaving the government. | But those ministers have now given mixed signals as to whether they are actually leaving the government. |
The crisis follows weeks of worsening ties between Berlusconi's party and Mr Letta's grouping. | |
Berlusconi's People of Freedom (PDL) objects to a planned increase in sales tax, which is part of wider government policy to reduce big public debts. | |
The Italian economy is in a dire state. | |
It is forecast to shrink by 1.4% this year according to the national statistics agency. | |
The agency also estimates that unemployment will reach a record high of 12.3% next year. |