Lunedì, 22 Ottobre 2018

Confindustria says soaring spread is hurting Italian economy


(ANSA) - Rome, July 19 - The high borrowing costs Italy is
having to pay because of the eurozone crisis and political
uncertainty about what will happen after the current
government's term ends in 2013 are stunting growth and keeping
unemployment from falling, industrial employers' confederation
Confindustria said on Thursday.
Confindustria's research department (CSC) added that
boosting the EU's bond-support mechanisms and putting them under
the management of the European Central Bank is "the only
efficient remedy" for the problem of the rising yield spread
between Italian and German state bonds.
According to the Italian employers' association's in-house
think tank, the high differential in the Italian-German
government bonds isn't justified by economic fundamentals and it
is causing a loss of 0.9% in Italian GDP growth per year,
costing 144,000 jobs and generating some 12.4 billion euros in
higher interest charges to service the state debt.
The spread problem is also penalizing Italian families,
according to Confindustria economists, forcing them to pay an
additional 12.1 billion euros in interest payments, while
Italian firms face higher financing costs to the tune of €23.7
"The anti-spread shield is the only remedy," according to
the economists, referring to last month's EU agreement to use
European rescue funds to support the bonds of countries facing
soaring borrowing costs.
"However, it must be profoundly redesigned with respect to
the current version, which must be assigned more resources
(ideally they should be unlimited)," they said, adding that its
management should be given to the ECB.
Looking ahead, the economists pointed to political
uncertainty as a key factor contributing to the high spread,
especially as regards the longevity of the reforms enacted by
the emergency technocrat government of Premier Mario Monti.
Markets remain nervous, according to the CSC, because
politicians from the parties supporting the government are
already distancing themselves from elements of the reforms as
they prepare elections in 2013.

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