'Draghi's successor will face a different set of challenges': Commentators warn next recession could be 'existential' for eurozone

Long-term risks

Investment commentators have warned fresh turmoil in Italy could lead the eurozone back into crisis, but this time the European Central Bank (ECB) will not have the monetary levers required to tackle problems when they arise.

Political risk in Europe reared its head again in Italy last week as, after two months of deadlock since the Italian elections, populist parties Five Star Movement and Lega finally agreed the outlines of a government. However, current Italian President Sergio Mattarella stepped in to ask former IMF official Carlo Cottarelli to become Prime Minister after Giussepe Conte resigned due to Mattarella rejecting his choice of eurosceptic Paolo Savona as economic and finance minister. This led to a crisis with calls for President Mattarella to be impeached by both parties and it appeared the ...