BUSINESS

Italian crisis takes a toll on Greece

ELEFTHERIA KOURTALI

TAGS: Markets, Finance

Political developments in Italy – with the prospect of another snap election – may disrupt Greece’s plans to stage a smooth exit from the bailout program in August, according to analysts, as they expect the cost of borrowing to soar again for Greece, which is always an easy target when the eurozone hits a snag.

A leading economist at political risk consultancy Eurasia Group told Kathimerini that “events in Italy are not helping Greece at all at the moment, and could derail the government’s plan regarding a clean exit from the program in August should this situation continue and the unrest persist.” He added that “at the moment all eyes are on developments in Rome.”

The political earthquake in Italy has caused a tsunami in the typically vulnerable Greek bond market. The price of the Greek 10-year bond dived on Tuesday, with its yield coming close to 5 percent – a level not seen since last November – to close at 4.8 percent, with a daily rise of 7.6 percent.

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