Italy could torture the market for weeks

11/09/2011 3:14 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Austerity yesterday and austerity tomorrow but never austerity today?

So Prime Minister Silvio Berlusconi will resign once Parliament agrees on an austerity package. But where’s the package?

The legislation containing the proposed austerity measures demanded by the EuroZone leaders who took Berlusconi to the woodshed at last week’s G20 summit was supposed to arrive last Thursday, Senate Finance Committee Chairman Mario Baldassarri told Bloomberg in an interview today. Then it was supposed to arrive Friday, he said. “Monday, they let us know they would wait for the vote in the Chamber of Deputies.” That vote took place yesterday.

And this morning the Senate Budget Committee suspended a session to examine the package after it failed to receive the text. A meeting this afternoon also ended quickly when legislators discovered they still hadn’t received the proposed legislation. Apparently the austerity package went to President Giorgio Napolitano only today.

The austerity measures are scheduled for a vote in the Senate next week and in the Chamber of Deputies after that.

So much for hopes of quick action that might restore market confidence or that might accelerate Berlusconi’s resignation.

On this schedule global financial markets are going to be treated to watching dysfunctional Italian politics for days and maybe weeks.

That should be fun.

And it could get worse. If the solution to Italy’s political crisis were to call new elections, those probably wouldn’t be scheduled before
February or March.

 

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