LONDON, Dec 5 (Reuters) - Italian debt insurance costs surged on Monday after a resounding defeat for Prime Minister Matteo Renzi in a referendum threatened to tip the euro zone’s third-biggest economy into political turmoil.
Five-year Italian credit default swaps rose nine basis points from Friday’s close to 180 bps, their highest since December 2013, according to data from Markit.
Renzi has said he will resign and this may open the door to early elections next year and the possibility of an anti-euro party, the 5-Star Movement, gaining power. The “No” vote, which also deals a blow to Italy’s fragile banking sector, sparked a selloff in the country’s stocks and bonds. (Reporting by Sujata Rao; editing by Nigel Stephenson)