Monday, 21 May, 2018

Brussels calls on Italy to stay committed to the 'European path'

By Lewis Krauskopf By Lewis Krauskopf
Melinda Barton | 17 May, 2018, 00:42

It contained plans for "economic and judicial procedures that allow member states to leave monetary union". Italian bonds and equities both stood out as euro zone laggards on Wednesday. Salvini wants the policy line on migration to get tougher.

This would cut 10 percentage points off Italy's debt/GDP ratio. Still, that kept it above levels traded late on Tuesday at 129 bps, reflecting some nervousness among investors.

"We have finished our work and sent everything to the leaders", said the League's economics chief Claudio Borghi, one of his party's negotiating team.

But unease was evident across Italian markets.

Italian stocks were down 0.5 percent against a rise in the pan-European index. It was on track for its worst day since Jan 2017.

Political uncertainty returned to Italy, as investors dumped Italian bonds and bank stocks on Wednesday, anxious that a new antiestablishment government has increased chances of the country exiting the euro.

Shares in the country's two biggest lenders UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI) declined around 3 percent.

The draft accord is likely to cause concern in Brussels and at European Central Bank headquarters in Frankfurt.

In upbeat comments that contained few of the cautionary notes he had used in recent days, Salvini said the 5-Star and League coalition would set a precise timeline for its reforms in issues including taxation, pensions and education.

Analysts said Mattarella's influence was likely to help, while final proposals were unlikely to be as alarming as first feared.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. This article is strictly for informational purposes only.