The Italian government has ostensibly rebuked the technocrats of Europe by what what the EU calls Italy’s planned budget deviation as ‘unprecedented’. The EU’s Moscovici handed Italian finance minister Tria a letter outlining EU concerns
The Italian government has ostensibly rebuked the technocrats of Europe by what what the EU calls Italy’s planned budget deviation as ‘unprecedented’. The EU’s Moscovici handed Italian finance minister Tria a letter outlining EU concerns ,
Economy Minister Giovanni Tria
The concerns are on the Italian budget Reuters reports citing an EU official. The contents of Moscovici’s letter to Tria include draft budget points to a particularly serious non-compliance with EU budget rules. The letter has asked Italy to respond in three days, by Monday.
Reuters says the EU called the budget a ‘significant deviation’ from the rules. The EU has for some time, since the last Italian election in essence been seeking more austerity from Italy and again cites the budget is source of serious and asks for clarification.
The italian government has shown they well elected as an alternative to the technocrats in Italy and as such they are acting on what the people want. They have not shied away from talking about leaving the Euro for example. It is likely they will not comply with the budget the EU wants at this time. The market is starting to cotton onto contagion risk and pricing the Italian bonds, default swaps and the FTSE Mib with more risk factored in,
Italy 10-year bond yield at 3.7%, spread approaching 330
via Valentina Romei @valentinaromei
Europe and U.S. markets are showing some contagion affects but not embracing it at this point. Currency traders coninue to sell the Euro. The EURUSD is now under 1.15 at 1.1480. Couple this risk with the Brexit saga, the GBPUSD is off 200 pips to 1.3058 in just a few days. Risk and uncertainty have been largely discounted for a while, keep an eye on this space.
EU Letter To Italy
Source: Reuters, EU
From the Traders Community News Desk