An exchange traded fund tied to Italy could see a bumpy ride after the government announced further austerity measures in response to Europe’s debt crisis.
The iShares MSCI Italy Index (NYSEArca: EWI) is in focus amid the latest drama that the Italian government faces.
Prime Minister Silvio Berlusconi announced plans to revamp the government’s $65.4 billion austerity package, according to a report. His plan includes a reduction of local government, while many Italians will have to put off retirement, report Stacy Meichtry and Giada Zampano for The Wall Street Journal. [Europe ETFs Fall Short as Short Selling Ban Extended]
“It looks complicated. We’ll have to see where the real spending cuts will come from,” said Francesco Giavazzi, professor of economics at Bocconi University in Milan, in the report. [The Contrarian: Single-Country ETFs]