Raj Badiani at IHS Global Insight said high bond market interest costs could ‘‘force the Italian political classes to refocus on the actions needed to push away intensifying’’ government debt pressures.
That’s what happened in late 2011, when rising bond yields intensified fears Italy might default. Pressure from that helped force Berlusconi to resign — and make way for Monti.
‘‘The slightly scary thing is, it’s easy to see how it can get significantly worse and continue to do so, but it’s very hard to see how things could possibly surprise on the upside,’’ said Sony Kapoor, managing director of think tank Re-Define. ‘‘So I think the best-case scenario is that the change in the political scene will reflect badly on the economy — but not too badly.’’
But, warns Kapoor, if ‘‘Berlusconi does come back and the old discredited guard of Italian politics comes back, things could get significantly worse rather quickly.’’