World markets have seen rough times throughout the week, as there were speculations that Silvian Berlusconi, the prime minister of Italy would be resigning soon. It is being said that Italy is following the footsteps of Greece. The Greek drama came to an end when George Papandreou, the Prime Minister, announced his resignation. This move would take its official form after the Prime Minister and the leader of the opposition, Antonis Samaras, decide on the new government.
When the Berlusconi reports were high, stocks were seeing an uptrend, but as soon as the government denied the resignation report, they again began their downtrend. Thousands of protesters voiced their opposition by gathering in Rome, on Saturday. The past few weeks have seen the borrowing cost of the country skyrocketing.
If we have a look at the world markets we can see that London Stocks are down by 0.6%, CAC40 (Paris) is down by 0.5% and DAX (Germany) also fell by 0.3%. Asian markets saw even lower closing.
Europe has been suffering from banking crisis and debts for months now. The leaders of European countries reached an agreement last month in which a second bail out for the debt ridden Greece was decided. It cannot be said that Greece is completely stabilized now, but it showing some signs of getting on the right track. However, fiscal instability and political drama have not allowed the investors to regain their confidence.
The comprehensive plan of the European Union is facing resistance in Greece, because of the extra austerity measures. There are worries that the plan can be rejected by the country and this has lead to a concern as to what effect it is going to have on the other European countries, especially Italy which is heavily debt ridden. People think that the condition of Italy is not going to improve significantly unless some huge pressure is put to get everything correct.