Flat-lining on the WSE

Two years after the Brexit vote, the moods on the global stock exchanges are still being determined by political unrest in Europe. This time the flash point is Italy, now governed by extremely populist parties that are – to put it mildly – somewhat antipathetical towards the EU. On the other hand, the prospect of a two-tier union is becoming more and more realistic, as the indications are that the euro zone will strengthen its cooperation and be given its own budget, etc. This means that investors will eventually differentiate markedly between countries with the euro and others, such as Poland. But before that happens, the Brexit scenario could be followed by Italy leaving the EU – an extremely important country for the bloc (with the fourth largest economy in Europe) and even more integrated with Europe than the UK. A likely debate on Italy’s exit from the EU or the eurozone would push the stock markets down even further – and we have already had a for