The trigger leading to the sharp market reaction was on the one hand the manifesto of the coalition between the Five Star Movement (M5S) and the League, which included disproportionate fiscal expansion. All Italian parties had made extravagant fiscal promises, but had not envisaged sticking to them when forming a government.
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We already knew that the Italian elections would prolong the difficult 2017 European electoral cycle well into 2018. Last year’s results, for better or worse, meant a certain return to the political centre ground for all the countries involved, despite the fact that the most extreme political options have gained force.