New Parliamentary elections are likely to be called for late June early July. It remains to be seen whether the populist parties, the 5-Star movement and the League will retain their leads. They have created a great deal of confusion and discord, especially their calls for exiting the EU and exiting the euro. Italians have a habit of picking odd people as leaders and their patience for a better economic future appears to be running out. The Italian government usually runs fairly smoothly without elected officials at the helm in Rome.

Meanwhile, Silvio Berlusconi is back in the running. His chances for winning are relatively good. He being a known quantity is a positive over his unproven opponents. He is pro-business and he is not anti-EU or anti-euro.

The issue of the EU and the euro are major issues, but they may be overcome as evidence piles up that Europe is better off keeping its institutions. The poor outlook for the UK in the face of Brexit has not been lost on anyone. Indeed, the UK economy is not doing well as poverty is expanding and unemployment is rising. Leaving the EU is unlikely to improve the UK’s prospects.

The political turmoil in Italy is having a negative impact on all the financial markets. The US equities markets are declining sharply, the European equites markets are all heavily in the red and so are Asian stocks. Interestingly there are no positive developments anywhere, a state of affairs that could easily bring about a global meltdown.