it is the most risky debtor country in the euro area


"Italy riskier than Greece", the FT: it is the most risky debtor country in the euro area

"Italy more risky than Greece», The Financial Times: It is the most risky debtor country in the euro area. THE'Italy, therefore, exceeds the Greece: it is the most risky debtor country in the euro area. Bond yields of Athens they fell below those of theItaly for the first time since 2008. The 10-year bond yield of the Greece – reports the Financial Times – stood at 1.10%. The yield on Italian equivalent securities rose to 1.16%.

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"The yields of both countries, spiked during the debt crisis, remain very low compared to historical standards, but the recovery of the bond market of the Greece it was more spectacular ».

Nailed for this year and also for the next one stagnation from which it struggles to pull itself out. With a deteriorating labor market, declining productivity and a public debt that continues to rise. For the EU Commission in 2019 and 2020, as it was in 2018, theItaly it is the European country that grows less. But the Economy Minister Roberto Gualtieri it is not alarmed, it considers the new European estimates in line with those of the Government and remains convinced that next year's GDP will be higher than expected.

Brussels sees the Italian economy stalled from the beginning of 2018, "and still shows no significant signs of recovery". For this reason it has left unchanged compared to the summer the estimate on the 2019 GDP (+ 0.1%), and cut instead the one on the 2020 GDP (from + 0.7% to + 0.4%). Next year there is a "modest" recovery in growth, "thanks to external demand and household spending, which is however attenuated by the deteriorating labor market". This is a new alarm, which emerges clearly "from the latest data".

It is probable, the EU explains, that "the drop in productivity leads employers to cut jobs or resort to temporary contracts". In addition, the citizenship income also plays a role, albeit for a purely technical effect: the number of unemployed will increase as many will enroll in the register of unemployed for the subsidy. The situation, in short, remains critical, given that also for the Eurozone and the EU in general the estimates are cut. And therefore the risks on Italy's growth prospects «remain anchored to the downside».

So much so that the debt of Rome is perceived to be more risky than that of Athens with the 10-year BTP yield which, according to the platform monitored by the Financial Times, rises to 1.16% against 1.10% of the ten-year Greek bond.

Moreover, the country remains exposed to "a further deterioration of the global economy and the potential worsening of financing conditions, due to its high debt". This time, however, Brussels is not launching any public debt alarms, despite upward journeys towards new records. According to the new autumn forecasts, in 2019 it will rise to 136.2%, and in 2020 to 136.8%. The deficit remains instead at 2.2% this year, and 2.3% next.

Debt is weighed by "weak growth in nominal GDP, deterioration of the primary surplus" and "rising cost of past measures", ie citizenship income and 100, "which will show their full annual cost only next year". But it is no longer time for warnings to Italy. Indeed, almost a promotion arrives in advance on the maneuver.

"This time there will be neither refoulement nor the opening of a procedure" due to excessive debt, the economic affairs commissioner Pierre Moscovici announced, rejecting the accusations of those who claim that he has more regard for this Government than with the previous one. "We did not use two weights and two measures" compared to last year, but "the exchange of letters this year has taken place in another spirit, with another approach, and the debate on the budget cannot be compared", has explained. The maneuver will therefore be promoted but the criticisms are not lacking. In particular, the Commission expresses doubts about the proceeds of the anti-evasion measures, "subject to some uncertainty".

For Gualtieri, rather than a criticism it is a matter of "ordinary caution", because the measures for forecasting the revenue "are by definition subject to uncertainty". For Italy they are even "underestimated", because "we believe they are greater". Moreover, Brussels has already obtained from Rome what it wanted: the freezing of 1 billion euros, as a "safeguard clause" that will help to contain the increase in public spending.

Last update: 20:44


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