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Italy's economy minister expects subdued market reaction to crisis

MILAN, Sept 29 (Reuters) - Italy's public accounts are in order and financial markets have already factored in political instability, Economy Minister Fabrizio Saccomanni said in a newspaper interview on Sunday hours after a political crisis left the government paralysed.

"The markets will take account of many things including the economic outlook which is clearly improving... I hope that as of Monday this trust (by the markets) will be confirmed," Saccomanni told financial daily Il Sole 24 Ore.

In a dramatic move on Saturday Italy's centre-right leader Silvio Berlusconi pulled his ministers out of the cabinet, effectively bringing down the government of Prime Minister Enrico Letta.

Growing political tensions have increasingly worried investors with Italy's borrowing costs hitting a three-month high at an auction of 10-year bonds on Friday.

"I think the uncertainty connected to the government's instability has been to a large extent already factored in during the last few weeks," Saccomanni said.