BRUSSELS Political instability in Italy makes life more difficult for Italy and the whole euro zone, but is not the start of new euro zone crisis, the chairman of euro zone finance ministers Jeroen Dijsselbloem said on Monday.
Italian Prime Minister Matteo Renzi said he would resign after his government lost a constitutional referendum last Sunday, throwing the country, which has bad loan problems in its banking sector, into political turmoil.
"I don't believe it is (the start of a new crisis). There is no reason for that. Political instability makes it more complicated for Italy and the euro zone. But it is a new reality we have to work with," Dijsselbloem told reporters on entering a meeting of euro zone ministers.
"Italy is a large economy, one of the largest in Europe, it has strong institutions. You can see that market reaction so far has been moderate," he said.
"We will have to wait and see what the next political steps are, what the government will do and what the president decides. The Italian situation hasn't changed economically, the banks are not different today than they were yesterday," Dijsselbloem said.
(Reporting By Jan Strupczewski and Robert-Jan Bartunek; editing by Philip Blenkinsop)