Lega’s Salvini call for fresh election takes gloss off Italian recovery

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Italy’s President Sergio Mattarella talks to journalists after Italy’s designated Prime Minister Giuseppe Conte returned the mandate to form a new government, on May 27, 2018 in Rome, Italy.

The FTSE MIB in Milan see-sawed in Wednesday morning trade and at around 11 a.m. CET (5 a.m. ET) was up by around 0.6 percent.

The Italian bond market has steadied after the politically sensitive two-year yield recorded its biggest spike since 1992 amid concerns over a fresh election. The yield opened at 2.73 percent on Wednesday and rose to 2.91 before falling to trade at around 1.98 percent at 11 a.m. CET. Prices move inversely to yield.

The Democratic Party in Italy has also urged President Mattarella to send the country straight back to the polls, insisting that it would not back a technocratic government led by Cottarelli.

Speaking to CNBC on Wednesday, Sandro Gozi, Democratic Party member and deputy secretary of state for political and European affairs, said it was time to end the confusion created by Lega and M5S.

“One day they want elections, one day they want to impeach Mattarella and the next they want to work with Cotarrelli. Uncertainty is always bad and the sooner we get political clarification, the better,” he said.