Coalition Government

Though quite young, Enrico Letta is known as a good mediator. Photo: Bloomberg

Relief in Italy, but the challenges ahead are huge

Investors greeted the news from Rome's highest hill with relief. Italy's two-year borrowing costs fell to their lowest level since the country adopted the euro in 1999. Like many ordinary Italians, they seemed cautiously buoyed by the fact that Europe's fourth-largest economy was inching towards a new government after two months of unprecedented gridlock.