### POV: It May All Hinge on Savona - 5SM.....>

ITALY: ### POV: It May All Hinge on Savona

- 5SM called for euro-sceptic Savona to withdraw his candidacy for the role of

econ min on Wednesday, although he is still the Lega's preferred candidate.

Furthermore a press report noted that "Italian PM-designate Cottarelli will move

slowly in trying to form a technocratic gov't in order to give parties time to

try to agree on a more political administration." Savona was the only stumbling

block re: the attempted formation of a cabinet, but the Lega seem committed to

naming him econ minister & continue to push for fresh elections as they aim to

capitalise on their post-election poll surge, although they do still trail 5SM.

5SM have suggested that Savona could assume another cabinet role.

- Italian yields remain elevated, as do their CDS and Italy's redenomination

risk (as proxied by CDS). These markets are seemingly hinging on the fortunes of

Savona and therefore the Lega party itself. Both the Lega and 5SM have played

down their ambitions re: Euro membership, with various spokespeople noting that

they never planned to leave the single currency, however, fresh elections may

bring this matter to the fore of their respective campaigns.