Is Italy the new Greece? Letís read out todayís article and find out what does the newest Italian turmoil imply for the gold market.

Nobody Expects the Italian Inquisition

The recent days have been quite tumultuous in Italy. The turmoil started last week when the new government submitted its spending plans to the EU. The ruling coalition set Italyís budget deficit at 2.4 percent of its GDP. The number is much higher than the current deficit which is set to be 1.5 percent of the GDP. The proposed difference between spending and revenue is also higher than 1.6 percent proposed by the countryís finance minister Giovanni Tria. So the number was above the expectations. Actually, it came as a shock, especially that the International Monetary Fund has projected it to fall to 0.9 per cent in 2019. Well, nobody expected the Italian inquisition.

Is Italy the New Greece?

Hence, the markets balked. Investors started to worry that Italy could be the next Greece. These fears are not unfounded, given Italianís grim fiscal position. As the chart below shows, the country has run a budget deficit consistently over the past 20 years