With
political turmoil still plaguing Greece and descending upon the much larger economy of Italy, the fate of the euro and
market stability worldwide hinged Tuesday on whether two of Europe’s most
tangled and unresponsive political cultures could deal with their tightening
fiscal gridlock.
The prospect of
a new transitional, technocratic government in Greece, and signs that Silvio
Berlusconi’s resilient hold on power in Italy was weakening in
advance of a crucial parliamentary vote on Tuesday, did little to reassure
investors that either country was prepared to grapple with the deep structural
changes that investors are demanding to restore growth and reduce deficits.
In both places,
it is not only the economy that is on trial, but also the ability of democratic
government to make highly unpopular choices.
The crisis
gripping Mr. Berlusconi’s government deepened as interest rates on the
country’s debt rose on Tuesday to 6.74 percent, the highest since the
introduction of the euro more than a decade ago and nearing levels that have
led to bailouts elsewhere. Read
more at NYTimes
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