Goldman Sachs is turning sour on Italy as the populists take control

Italy. Joe Raedle / Getty Images

Goldman Sachs has removed one of Italy’s most prominent companies from a list of recommended stocks, as a direct consequence of the incoming populist government.

Italy has been without a government for more than two months since an inconclusive election in March but is the Five Star Movement and the Lega Nord have now agreed on the principal terms of a ruling coalition.

The coalition has Goldman worried about Enel, Italy’s state-controlled utility company. Both Five Star and Lega Nord are committed to using more renewable energy while in government, something that is likely to hurt Enel as it would likely end up lowering energy prices and impacting the company’s profitability.

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