Forex Flash: Five Star Movement complicates efforts to ease turmoil - Nomura

FXstreet.com (Barcelona) - Richard Koo, Chief Economist at the Nomura Research Institute notes that Mr Grillo´s Five Star Movement has elicited a great deal of concern, with some fearing it could spark a new round of political turmoil.

He adds that Mr. Grillo is not only a well-known comedian but has a quick mind, is a good speaker, and is very ambitious. His key slogan exhorts voters to change Italy itself, not just change Italian politics, and he built up a strong grassroots organization prior to the election. Further, Koo adds that Mr. Grillo has so far rejected the possibility of a coalition with one of the existing parties, which to his followers symbolize the old political order. Five Star’s 25% share of the vote however, means that former Prime Minister Silvio Berlusconi’s center-right party is likely to play a role in forming a government with the remaining parties. However, he writes, “But if the left-of-center parties that supported the reforms are forced into a coalition with Mr. Berlusconi, the popular image of the reforms could be sullied by the alliance with the old guard, lending further momentum to Five Star.”