Italy's political turmoil could hit the continent harder than the Greek financial crisis and the Brexit vote, according to the finance minister of Latvia.
A week of political turbulence in Italy saw dramatic repricing of the country's assets and has triggered fears of market contagion across the entirety of Europe.
Asked during a panel discussion in Paris Wednesday if the recent market activity could eventually impact growth, Latvian minister Dana Reizniece-Ozola was unequivocal.
"Definitely," she said. "I think we can see what an impact Brexit has already caused to the EU in general, and if Italy fails to form a government that might be still pro-European and still dedicated to the reforms and getting the country back within the fiscal stance, that might be a bigger harm to the whole of Europe."
Italy's financial situation was already a major point of concern for the 28-member EU bloc. Its growth is anemic, unemployment is high at 11 percent, and its public debt is 132 percent of gross domestic product (GDP) compared to the euro zone's 87 percent — making it the fifth-most indebted country in the world and the second in Europe, after Greece.