Italy political turmoil a headache for Europe’s central bank

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — Italy’s political turmoil is making life harder for the European Central Bank as it hikes interest rates and raising bad memories of the eurozone debt crisis a decade ago. Premier Mario Draghi has offered to resign, and the threat of political changes as borrowing costs increase have raised concerns that the 19-country eurozone could head into another crisis. The ECB is expected to outline a new financial backstop Thursday aimed at capping borrowing costs for Italy and other less financially solid euro countries. The bank doesn’t want the bond market to tee off on Italy’s troubles and start charging excessive borrowing costs that would erode the government’s ability to support the economy.