Investors are worried the ongoing crisis in Italy will have a ripple affect across the continent

Investor confidence in the European economy has severely dipped following the ongoing uncertainty in Italy.

Concerns over the new populist government’s euro-skeptic tendencies and budget-busting spending plans prompted a slide in sentiment among financial-market participants, according to a survey by Sentix. Expectations for the euro-area economy dropped to the lowest since August 2012, when the region was embroiled in a debt crisis that threatened to break up the bloc.

“The new government in Italy is giving investors fears for the euro zone,” Sentix said. While U.S. tariffs on steel and aluminum are “also having a negative impact” it added that those concerns “seem to be even lower than those before the government in Rome reopened the euro crisis. Either way, investors expect a serious slowdown in growth.”

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