The center-left democratic party candidate Pier Luigi Bersani leads with 34% of the vote, but Berlusconi is close behind with 30%.
Two of the four leading candidates in the Italian election are convicted criminals. Such is the state of politics in this highly-indebted country as Italians go to the polls this weekend to choose a new government.
Recent market action shows global investors are nervous about the outcome. Italy’s stock market sold off sharply on Thursday and its interest rates have started to rise again. The reason: It is quite possible that no party wins a strong mandate—leading to an unstable government, paralyzed by infighting, and unable to fix Italy’s finances.
Italy is the third most indebted country in the world after the United States and Japan, owing 1.9 trillion euros ($2.5 billion).
If Rome doesn’t continue to right its financial ship by cutting government spending and reforming the economy, so it can grow faster, lenders worry Italy will not generate enough tax revenue to pay back its debts—possibly leading to another round of financial chaos and contagion as we saw in 2010 and 2011 in Europe.
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