Italian assets tumbled after populist leaders Matteo Salvini and Luigi Di Maio defeated their mainstream cabinet rivals to set a budget deficit target that threatens the country’s financial stability.
The European Union’s economy chief said Italy is taking a risky bet on fiscal stimulus considering the scale of its debts, after the two deputy premiers defeated Finance Minister Giovanni Tria in their first battle to set next year’s budget-deficit target at 2.4 percent of output. A 2 percent threshold had emerged as a litmus test for financial markets worried about a destabilizing spending spree.
