Italy’s Di Maio: Government crisis is now over

• Italy’s Di Maio believes that the government crisis is now over.
• The Italian 10-year bond yields falling to record lows.

Italy’s Di Maio believes that the government crisis is now over and the two parties, Five Star and the centre-left Democratic Party (PD), have agreed a 26-point draft programme to rule Italy after nationalist League leader Matteo Salvini pulled the plug on the previous administration.

The online vote of Five Star members means Italy now avoids fresh elections and the independent law professor Giuseppe Conte will stay on as prime minister. The markets welcomed the news with 10-year bond yields falling to record lows. However, there now needs to be a commitment to pass a budget within weeks to block a rise in VAT (sales tax), otherwise, it will kick in automatically on 1 January if the government fails to reach its debt-reduction target.