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Italy is facing snap elections which could turn into a referendum on the euro

Italy’s power struggle is rattling global financial markets, with investors fearful the looming prospect of fresh elections could be fought over the country’s role in the European Union and the euro zone.

abandoning their efforts to form a coalition over the weekend amid a dispute with the country’s head of state.

President Sergio Mattarella, who was installed by a previous pro-EU government, refused to accept the nomination of euroskeptic candidate Paolo Savona for economy minister on Sunday.

Instead, he set the country on a path to another snap vote by appointing former International Monetary Fund (IMF) official Carlo Cottarelli as interim prime minister. Cottarelli, who became known as “Mr. Scissors” for his reputation regarding cuts to public spending in Italy, is now tasked with the planning of fresh elections and passing the next budget.

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