NN IP: Italian election - less anti-EU talk, more deadlock

The main area of contention in Italy no longer seems to be EU membership but rather the outlook for fiscal policy. Combined with a strong upturn in the Italian economy, this may be a reason why the upcoming elections are not a big market theme. However, investors should better not be too complacent.

26.02.2018 | 13:11 Uhr

Next Sunday, on March 4, Italy will hold its long-awaited general election. After a turbulent 2017 election cycle that included crucial contests in the Netherlands, France and Germany, it is now Italian voters’ turn.

Investor tensions about the outcome have dropped considerably since last year. The Italian economy’s strong upturn has reduced voter dissatisfaction, and the country’s anti-EU parties have significantly toned down their rhetoric. In addition, the new electoral system will make it more difficult for one political bloc to achieve a decisive political victory.

Investors though, should not be complacent. A prolonged political deadlock in Italy seems likely and the country’s economy continues to suffer from a low potential growth rate.

You can read more about our views on the upcoming Italian election here in the HouseView Special, written by Willem Verhagen, Senior Economist at NN Investment Partners.

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