EU STOCKS down ahead of Berlusconi vote, ECB ahead

This week in Europe sees an European Central Bank meeting, unemployment data for the euro zone and a vote on Silvio Berlusconi’s future in Italian politics, so it’s shaping up to be both busy and interesting. 

Over the weekend, former Prime Minister Silvio Berlusconi’s party said all five of its ministers would resign from the cabinet, sending the yield on 10-year Italian government bonds to a three-month high. In response — and to avoid snap elections — Prime Minister Enrico Letta has scheduled a vote of confidence for the government in parliament on Wednesday.

Berlusconi said he engineered the walkout because he opposes a planned increase in the sales tax, but Prime Minister Enrico Letta called this a “huge lie.” Last week, Berlusconi’s allies threatened to bring down the government if a special Senate committee meeting on Friday, Oct. 4 votes to expel the former prime minister from the upper house because of his tax-fraud conviction.

In Italy, UniCredit lost 4.3% and Intesa Sanpaolo tumbled 4.9%.

A gauge of basic-resources shares was the third-worst performer in the Stoxx 600. Rio Tinto and BHP Billiton Ltd. retreated 2% and 1.4%, respectively.

The Stoxx Europe 600 Index fell 0.7% to 310.02. The UK FTSE 100 fell 0.83%, the CAC 40 in Paris dropped 1.17% and the Xetra DAX retreated 0.92%.

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