(MENAFN- Asia Times)
Fears of political instability in Spain and Italy spurred a sell-off in the two countries' sovereign bonds on Friday, raising the specter of spillover into global markets.
Concern over a run out of Italian debt has been building since a populist coalition formed, and their inability to get presidential approval for ministers has only made matters worse, as The Financial Times reported Friday .
'We saw in Greece how dangerous it is if a country has a bigger and bigger debt and I hope that we will not have a second Greece in our neighbouring country, Italy,' Austrian chancellor Sebastian Kurz was quoted as saying.
Meanwhile, the main opposition party in Spain called for a vote of no-confidence in Prime Minister Mariano Rajoy, sending Spain's main stock benchmark plunging as much as 2.7%.
The sell-off in Italian debt is still of greater concern. As we wrote last week , with Italy's US$2 trillion in outstanding government debt, a run out of the country's assets would have spillover effects everywhere.
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