EU monetary Affairs Commissioner Pierre Moscovici hopes to have an agreement with Italy in the deficit dispute. Italian government bonds are, despite the Rating downgrade is on the upswing.
The European Commission wants plans no crisis with Italy, because of the budget, said Moscovici on Monday the radio station France Inter. However, the EU still have questions and I expect in the course of the Monday answers. The structural deficit in Italy was too high.
Vice-Prime Minister, Luigi Di Maio, the Italian government is ready to consult with EU authorities. In a Letter to the Commission, you will explain the reasons for the planned new borrowing in the coming year. The government have no intention of leaving the Euro-Zone.
The government of right-wing Lega and the populist Five-star movement wants to spend in the coming year more money. The EU Commission accuses her of therefore violations of the EU rules. Brussels is worried, because Italy sits on a debt mountain of more than 130 percent of gross domestic product. It is the second highest in the Euro Zone after Greece.
“No more downgrade”
In spite of a downgrade of the credit rating of Italy, the descent of the bonds of the country is finished for the time being. The pushed the yield on ten-year title on Monday morning, 3,342 of 3,586 percent. Investors were relieved that the Rating Agency Moody’s have put the Rating Outlook to “stable”. So as not to further downgrade the threat for the time being.
Moody’s had lowered the rating of Italy on Friday, as expected, to “Baa3” from “Baa2”. In a further downgrade by the Agency, the bonds of the highly indebted country would lose the seal of quality “Investment Grade”. Then would have to separate some of the institutional investors of these securities.
ul/hb (rtr)