ITALIAN MPs failed to choose a new President in the first round of voting yesterday, creating more uncertainty in the already weakened economy.
The next President’s first task will be to try to break the deadlock in parliament which has stopped the formation of a government since the elections in February. If a government is not formed Italians will return to the polls for fresh elections sparking yet more uncertainty.
The country saw borrowing costs soar in 2011, while technocrat Mario Monti became PM. He brought spending under control, reassuring markets. But much of his work risks being undone if no government is formed.
Former trade unionist Franco Marini gained the most votes with 521 of the 1007 parliamentarians behind him, but failed to reach the two-thirds majority needed.
Meanwhile, Germany has approved the Cypriot bailout, removing one key hurdle to the cash-strapped country surviving its current woes and remaining in the Eurozone.
The Bundestag backed the €10bn (£8.6bn) bailout from the EU, alongside the wind-up of Popular Bank and the bail in of its largest depositors and those of the Bank of Cyprus.
The Germans also voted to extend the terms of bailout loans to Ireland and Portugal after the two countries stuck closely to the bailout plans.
Easing the conditions will lessen the squeeze on the troubled nations and make it easier for them to return to the bond markets.