Italian election looks too close to call, Societe Generale warns

During the final week before Italy’s elections, the focus on European economists and analysts remains on the outcome which will be determined by the vote, with the associated risk of an unclear winning party.

According to Societe Generale, the Italian election still has the potential to throw up a number of surprises.

“Over the past year sentiment improved significantly with the policy change towards austerity and structural reform in Italy. Much of the current confidence relies on a continuation of such policies, and possibly of Mr. Monti forming part of any future government, while the OMT programme provides an additional safety net, ” said economist Anatoli Annenkov.

Based on the latest trends in polls, there are some worrying signs, suggesting that Italy may again be heading for a period of political gridlock and slow progress with structural reform.

This outcome has become source for speculation over the last days, given that electoral polls can’t be released during the last week of the campaign.

“In particular, majority in the senate will be difficult to achieve and there is considerable uncertainty if and how Mr. Monti could form part of any centre-left coalition. The still large number of undecided voters also suggests that the election could still tip in either direction,” Annenkov added.

 

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