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'Grillo' top problem for EU, says Goldman Sachs president

Italy's growth could be hampered if M5S leader gains ground

29 March, 11:25
'Grillo' top problem for EU, says Goldman Sachs president (ANSA) - Rome, March 29 - The biggest problem currently facing the European Union (EU) is not the struggling economy of Cyprus but the "Grillo factor" in Italy, Jim O'Neill, president of Goldman Sachs Asset Management, told Bloomberg TV on Friday.

"I don't understand how some of the these tough guys in the north are not thinking about that issue," said O'Neill in reference to the political ascent of the anti-establishment 5-Star Movement (M5S) led by Genoa comic Beppe Grillo, which took over 25% of the popular vote in recent general elections.

"Italy is the third largest country in the eurozone and if they don't start to have some growth sometime soon, these guys are going to ask questions more seriously about the benefits of staying in the euro...," he continued.

"What is the EU doing to deal with that? The EU seems to get its decisions made for it by powerful voices in certain countries particularly Germany," concluded O'Neill.

On Friday, President of the Republic Giorgio Napolitano began a new round of talks with political parties after centre-left leader Pier Luigi Bersani announced that he had been unable to garner sufficient support to form a new government to replace the technocrat executive led by Mario Monti.

His failure was partly due to opposition from the M5S, which now holds the balance of power in a hung parliament.

Monti was brought in to replace ex premier Silvio Berlusconi in November 2011 at the height of the sovereign debt crisis in the eurozone but his government has done little to kickstart the struggling economy.