Italy: Mediobanca Forecasts Ungovernability, ECB Bailout
February 21, 2013 • 10:27AM

Mediobanca Securities issued a report yesterday forecasting an ECB bailout of Italian bonds if no clear winner emerges in Italian elections on Feb. 24-25.

The victory of the center-left is no longer assured, after Berlusconi successfully reduced the initial gap between the DP and his party. Neo-Flagellant Beppe Grillo's zombies will get around 20% or more, and thus even a DP-Monti coalition might fail to get a majority.

Giulio Tremonti issued a similar forecast two days ago, saying that even if the center-left wins a majority in the Chamber of Deputies, they won't get it in the Senate and this means ungovernability.

The result of ungovernability will be instability in the bond markets, and this might force ECB President Mario Draghi to intervene by purchasing Italian bonds, Mediobanca wrote. In a few months, then, there will again be early elections.

All of this was predictable (and predicted) many, months ago.