European stock markets have endured a torrid month, with all bar one of the major continental exchanges trading lower on 2 October than they had on 3 September.
Even the exception, Paris, was heading downwards after period of higher share prices.
Political difficulties in the eurozone’s “big three” – France, Germany and Italy – will have played their part in depressing stock prices. These are the three countries that are members of the Group of Seven rich nations.
Italy “better off outside euro”
Also casting a cloud over share values was July’s announcement from the International Monetary Fund (IMF) that it had cut its growth forecasts for the single currency bloc both for this year and next.
In Frankfurt, thestood at 12,346.4102 on 3 September. By 2 October, it had declined to 12,287.5801.
opened the period at 559.78 and ended it at 549.33, while in the index stood at 9,376.0996 on 3 September and 9,305.5000 on 2 October.
In Paris, theopened the period at 5, 413.7998 and ended it up at 5,467.8901. However, it is down on the 5,540.4102 seen on 27 September.
Even before Mr Borghi’s remarks, the stage was set for a confrontation between Italy’s new governing coalition and the European Union. Including ministers from the anti-establishment Five Star Movement and the right-wing League. The coalition may defy Brussels-imposed constraints on increased public spending and tax cuts.
Upset on cards in Bavaria
Meanwhile in France, the honeymoon period of President Emmanuel Macron is long over as the youthful leader’s reform programme seems stuck and his former security aide Alexandre Benalla has been involved in a scandal involving his alleged beating of May Day protestors. Mr Macron’s approval ratings are currently about 30%.
In Germany, elections in Bavaria on 14 October are expected to see a surge in support for the right-wing Alternative for Germany party. This would be at the expense of the Christian Social Union, the traditional governing party in Bavaria, the region’s version of Chancellor Angela Merkel’s Christian Democratic Union and a partner at national level in her coalition government.
In July, the IMF updated the growth forecasts published at its meeting in Washington in April. For the eurozone, it predicted 2.2% growth this year, a 0.2 percentage point cut on the April forecast, and for next year it forecast growth of 1.9%, a reduction on the April forecast of 0.1 percentage points.
The UK forecasts, downgraded by 0.2 percentage points for this year and unchanged for next year, are more downbeat than those for the eurozone, at 1.4% and 1.5% respectively.