European Central Bank member Ewald Nowotny said he views the situation in Italy with concern, but he did not think it would reach a real crisis. Italian government bonds have been under selling pressure over concerns that the new coalition government will begin to increase spending Italy cannot afford.
On the other hand, there are fears that Eurosceptics within the coalition will try to push Italy out of the euro area. Italian borrowing costs fell on Monday, and the Italian economy minister said the government had no intention of leaving the euro area and it is planning to lower debt levels.
Nowotny, who is also governor of the Austrian central bank, declined to comment on the ECB's monetary policy.
