Italy now more risky than Namibia as political risk premium jumps

Sid VermaMatthew Turner
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Mario Monti's shock decision to step down as prime minister of Italy, and Silvio Berlusconi's declaration to contest the February election, means Italy's political risk score is lower than Namibia, according to Euromoney Country Risk.

Italy’s political risk has shot up, following the announcement by Mario Monti to step down as prime minister after the 2013 budget is approved. The decision will bring the country’s general election forward by several weeks. A report by the Financial Times, published on Monday evening, revealed Monti is in talks with centrist parties to contest the February election, following pressure from his peers and financial markets to stay in elected politics.

Analysts participating in ECR’s survey have been quick to highlight the risks in Italy’s political environment, with former PM Silvio Berlusconi declaring his intention to launch another electoral bid. With a political assessment score of 60.5, Italy is now politically riskier than other eurozone peripheral economies – Ireland, Portugal and Spain; only Greece has lower political assessment score.

This score makes Italy riskier than Oman and Namibia, by...