Dealing with a populist government in Italy

Dealing with a populist government in Italy
By Stefan Grobe
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Looming tensions between Brussels and Rome worry markets


Italian government bonds were under pressure on Friday, with investors eyeing the fraught political situation in Rome and looming tensions with the European Union.

After criticizing Italy for being EU-sceptic, Brussels has changed tactics and is now trying to bring Rome back into the fold.

EU Commission president Jean-Claude Juncker had warm words for Italy.

"Italy's place is at the heart of Europe. And of the EU. And it reflects how much this country has done to build a united Europe. Italy yesterday, as today deserves respect and trust."

Juncker spoke at the Brussels Economic Forum, focussed on the future of the EU economy in an era of digital disruption.

US economist Jeremy Rifkin warned also against political disruption.

"Now it's a moment across Europe, not just in Italy, where the voters are voting and what I hear them saying behind all of the rhetoric, what I hear them really saying is we need to have more say over our own economic destiny in the locales, in the regions we live.

What we need now is a governing vision that is commensurate with the lateral distributed open and transparent digital platforms we are creating. And that vision is the subsidiary principle. That doesn't mean we preclude nation states. It certainly doesn't mean we preclude the EU. But it means that all economic and political decision making power should start at the place where people live and work and then like Wifi move out across regions and across Europe and across the Mediterranean around the world."

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