After BRICEST ... Does the EU hold up in quality?

It is happening in Italy today with all the political chaos and market turmoil that can be described as the "last-ditch efforts" to try to form a coalition government to avoid a new "early" election.

The global echoes of the concerns surrounding the Italian crisis and the ensuing violent reaction to the European stock market, which pushed the euro to the lowest level in almost a year, are based on two main axes:

First, financial concerns about the fate of Italy are concentrated in the size of its huge debt, the highest levels of indebtedness around the world, so there is a real fear that the eurozone's third-largest economy will default to the European Central Bank.

Hence, information suggests that the ECB may extend the quantitative easing program this year if markets require, and the sharp rises on Italian bonds are only evidence that the "European" is unable to contain the global repercussions of this crisis.

Political fears, and the danger of holding a second election in Italy, because they clearly refer to the victory of the extreme parties (the 5-star and the extreme right-wing "The League"), so that these elections may be a referendum on the membership of Italy In the European Union, which is circulated between experts under the name of "#QUITALY" in the footsteps of the "BREXIT".

Like the Greek crisis?
Those who scrutinize the "crisis" of Greece see the gap as nil, despite Greece's "drama", but opinion polls point to EU popularity within the country. While in the other side, a large rejection by the Italian voter to the European Union and the economic policies followed, notably those related to government spending and fiscal austerity.

Hence, the chances of the new anti-euro parties, which won last March "the 5-star movement and the LEAGUE", are further enhanced if the path towards a second election moves forward, but this time they will take over the vast majority and thus take greater legitimacy in moving forward. To draw up a political and economic program that might run counter to the financial rules imposed by the European Union.

June 29 is a possible date for the elections
In response to the rapid developments over the past two days, it is noted that Italian President Sergio Matarilla's rejection of the candidate of the extreme parties (Paolo Savona, one of the main supporters of Italy's exit from the Union) to take up the post of Minister of Economy in the government was the fuse that ignited the Italian crisis.

While the Italian president put the country on track for early elections by appointing former IMF official Carlo Cotarilli as interim president of the government and commissioning him to plan early elections.

This contrast in the two positions, quickly reflected on the # European markets yesterday, which "red" on it.

To return stocks and bonds and breathed a sigh of relief today with the start of the formation of a new government, as the # rebounded the euro with the support of the signs of political breakthrough in Italy.

But despite the looming looming, "The LEAGUE" is throwing the ball at the Matarilla stadium, saying "the decision to hold a second election is not for the Italian president."

In light of this political uncertainty, experts are likely to move Italy to new elections for the second time this year, specifically on June 29. The Italian Constitution stipulates that elections must be held 60 days after the call is made.

What will happen if elections are held?
Experts warn that markets may see further widening of the gap between Italian and German Treasury yields if Italy continues to hold elections, an indicator of the risk investor sees in investing in Italy.

Indeed, yields on Italian short-term bonds may continue to rise, which will increase the cost to banks, especially as the market value of Italian bonds traded in the market is "huge" estimated at 1.6 trillion euros.