Brussels tomb Budgets Italian
What will happen now after lying to the Commission, the Budget Italian
The historic rejection of the European Commission to the Budget of Italy to 2019 is presented, a priori, as one of the main risks for the european markets. After the words yesterday of the commissioner, Pierre Moscovici, the major indexes of the Old Continent accentuation of his fall, however, shortly before the close managed to recover some of the lost ground. The risk premium on Italian, another of the foci of attention in these days, has gone from less to more during this Wednesday, from 312 points to overcome again the 320; the Spanish, ranging these months depending on the indicator neighbor, has endured in the level of 122 whole.
fears have also gone in crescendo in the european stock Exchanges, where the opening of Wall Street has been a turning point to the downside. The Ftse Mib in Milan, which has been maintained with slight losses during a good part of the session, ended with a decline of 1.69% and the Ibex 35, which has even had moments on the positive side, has closed on stood at-0.56%. The same thing has happened to the Dax of Frankfurt(-0,73%), the Cac in Paris (0,29%) and the Ftse 100 in London, which has saved the green for the minimum (0.11 per cent).
Thus, markets are still pending in the confrontation between Rome and Brussels, and everything will depend on the extent to which the Government of Giuseppe Conte wants to tighten the rope with the EU.
“While the pressures of the financial markets remain manageable, it is likely that the Executive [Italian] to adhere to its fiscal plan and keep your strategy of tension with the institutions of the EU, given that it continues giving its fruits in terms of popularity,” says the british bank Barclays.
however, “if the pressures of the market increase of a non-linear way, the Five Stars Movement and the League would have to decide whether to change its fiscal stance in order to ensure political stability, if they prefer to play the role of victims to form an alternative coalition government or if they prefer to return to the polls,” continues the british institution.
A similar analysis made from the team of Bankinter, for whom “the volatility is assured” until you know the outcome of the situation. For practical purposes, pointing, “what’s most important is that the risk premium on Italian do not stray too far from the psychological level of 300 points and the euro remains relatively stable”, thus ensuring that the Bags are stable throughout this week.
The common currency has fallen in the last few hours in their struggle against the dollar and will change this Wednesday, to 1.14 greenbacks, its lowest level since August.
Italy now has three weeks to respond formally -and without shoes by means – to the change request of the Commission and then the Commission itself should decide on its final procedure before 30 November.
Until then, predict from Barclays, one of the keys to the evolution of the showdown will be the rhetoric that employs the Executive Italian. “We hope the Government maintains its posture of confrontation, but try to avoid positions that can raise the pressures of the market in a nonlinear manner. We recognize that this strategy carries high risks,” he says.
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