ROME, June 12 (Xinhua) -- After weeks of volatility sparked by nerves about Italy's pending populist government, markets largely calmed after the government was installed and as it became less likely that its most dramatic economic reforms were imminent.
Stock and bond markets in Italy were particularly irregular in May, with big ups and downs that over the course of the month resulted in net losses.
The MIB-30 blue chip stock index on the Italian Stock Exchange lost a tenth of its value in May and government bond yields on secondary markets -- a measure of investor confidence that a government will be able to pay its debts -- surged to levels last seen in 2014.
But since the new government, headed by Prime Minister Giuseppe Conte, was put in place on June 1, markets have been comparatively calm.
Stocks were mostly stable after the new government came in and in recent sessions they have edged higher. Similarly, bond yields have fallen from their previous highs, even if they still remain above levels from early in the year.
Part of the reason is technical, according to Alberto Borgia, president of the Italian Association of Financial Analysts (AIAF).
"Compared to peaks this year in January and then April into May, there was a bit of profit taking, led by foreign investors who were nervous about the new government," Borgia told Xinhua.
Also relevant remarks from Minister of Economy and Finance Giovanni Tria, who has repeatedly denied speculation that Italy might abandon the euro currency. Though he has not done the same with the new government's stated 100-billion-euro (120-billion-U.S.-dollar) plan to cut taxes and establish a basic income for all citizens, Tria has said Italy would do it without increasing the country's debt.
"Our goal is to (increase economic) growth and employment," Tria said. "But we do not intend to revive growth through deficit spending."
Tria was a last-minute choice as minister of finance in the new government, after Italian President Sergio Mattarella blocked the choice of euro-skeptic economist Paolo Savona for the post. Savona was instead appointed as minister of European affairs.
"Markets need certainty and various factors, such as the appointment of Giovanni Tria and the end of speculation about the new government actually let investors evaluate the situation," Andrea Fumagalli, a political economist with the University of Pavia, told Xinhua.
It is, however, far from clear how long the period of calm will last.
Italian debt remains more than 130 percent of the country's gross domestic product, and economic growth has now trailed the growth rate of the European Union as a whole for 13 of the last 15 years. Unemployment rates are high, especially among young workers, and the banking sector, despite big improvement in the last year, remains one of the most fragile in Europe.
Additionally, according to Borgia, the "quantitative easing" from the European Central Bank -- a strategy of buying national bonds and other securities to increase the money supply in an economy -- is set to end later this month.
