Italian crisis felt in Spain and wider EU

In Rome, the EU is dealing with eurosceptic forces. "This will not be the case whatever happens in Spain," pointed out Camino Mortera-Martinez from the Centre for European Reform think-tank. Mortera-Martinez noted that the main cause of instability in Spain remained the Catalonia crisis and that market uncertainties could end up playing into Rajoy's hands by making Spanish MPs and people wary of creating even more volatility.

"It's very difficult to afford instability with the central government when it is managing Catalonia," she said, referring to the suspension of the region's autonomy over independence claims.

"The PP is playing the Catalan and the instability cards. If markets keep going down, that would weaken the [Spanish] opposition," she said.