The decision by Italy’s president to reject a populist coalition government and install a government led by a former director of the International Monetary Fund is winning applause from European Union elitists even while financial markets globally convulsed.

The move sent the borrowing costs of the Italian government soaring Tuesday, while stocks around the globe sank on fears of contagion.

The yield on Italy’s two-year bond skyrocketed to 2.69 percent Tuesday, a stunning move considering the same bonds were offering a negative yield just two weeks ago. Bond yields move in the opposite direction of bond prices, so the rising yield indicates a bond sell-off.

The effects of the anti-populist move were felt around the world. In the U.S., the Dow Jones Industrial average sank by more than 450 points Tuesday morning, worse than a 1.8 percent decline.

The decision to reject the election by President Sergio Mattarella of Italy came in for criticism from Mohamed El Erian, the Chief Economic Adviser at Allianz, who described it as a “big political miscalculation.”

“He should have respected the outcome of the election. He should have given the new government a chance,” El Erian said in an interview Tuesday on CNBC’s Squawk Box. “In blocking the appointment, he said he wanted to avoid market turmoil. He didn’t realize the market would see through this and ask ‘what next?’ This was a big political miscalculation.”

In a column for Bloomberg, El Erian was even more direct:

“Elements of the establishment welcomed the decision by President Sergio Mattarella of Italy to appoint a technocratic prime minister. At the same time, markets sold off across the board, driven by the perception the move could increase the probability of significant turmoil not just in Italian markets but also elsewhere in Europe… By rejecting the euroskeptic finance minister, Mattarelli hoped to secure a period of relative stability. Instead, financial market anxiety has risen with the greater possibility that Europe could become the central issue of an election, a development many politicians had wished to avoid after the experience with the Brexit referendum.”

European Union elites, however, have been taking a very different stance, insisting that Italians rather than Eurocrats need to get in line. German EU Commissioner Gunther Oettinger reportedly said that “markets and a ‘darkened’ outlook will teach Italy’s voters not to vote for populist parties in the next elections.”

That kind of refusal to accept reality on the part of top EU officials is likely also contributing to market turmoil Tuesday.