Euro Recovers as Monti Attempts to Calm Markets
The euro found some footing on Tuesday morning following Monday's roller coaster ride after Italian Prime Minister Mario Monti unexpectedly announced that he would be stepping down.
Initially, the news rattled markets as the debt ridden nation is already struggling to repair a broken financial and political system. Many saw his resignation as a setback for the common currency and a heavy weight on its already struggling neighbor, Spain.
Monti's decision to resign was preempted by former Prime Minister Silvio Berlusconi and his political party's decision to withdraw its support for Monti. Berlusconi is a member of the People of Liberty Party, and is intending to lead the party in the 2013 election.
Monti has always been positively regarded by his northern European peers, as he was committed to leading the country out of its crisis through economic reform. With his resignation came renewed worry about the entire region's crisis as a lack of leadership could change the course of the widely praised reforms started by Monti.
However, Monti made statements on Monday reassuring the markets that his decision to resign wasn't going to derail the country from the progress it has already made. According to CNBC, many analysts believe the market's reaction to the resignation was excessive, as elections were set to take place months in the future anyway.
There are still some who say that this new development could deliver a massive blow to Italy's economy, as it has long suffered from messy politics and Monti's shoes will be difficult to fill.
Gains from Monti's reassurances were mitigated by data from Germany showing that the eurozone powerhouse was feeling the effects of the crisis. Last week, the country's Bundesbank cut growth expectations and this week, new data was released showing the country's trade surplus in October was at its lowest in more than six months.
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