Domenica, 23 Settembre 2018
ROME

Monti rebuts Berlusconi's claim spread is a 'con'

English
© ANSA

Rome, December 11 - Premier Mario Monti was backed
by the head of Italy's industrial employers' confederation on
Tuesday in rebutting his predecessor Silvio Berlusconi's
assertion that the bond spread was a "con" that does not matter.
The yield spread between 10-year Italian bonds and the
German benchmark is considered by experts to be a barometer of
Italy's borrowing costs and of investor faith in the country's
ability to weather the eurozone crisis.
"The spread is a con, it's an invention with which an
attempt was made to bring down the majority (in parliament) that
was voted in by the Italian people and which governed the
country," Berlusconi told one of his Mediaset TV channels.
"No one had heard of it before. It's only been talked about
for a year. What do we care about it?".
Berlusconi was forced to resign in November 2011 when
Italy's debt crisis looked in danger of spiralling out of
control after the spread hit peaks of over 500 basis points with
yields of over 7%, levels considered unsustainable in the long
term.
Italy is exposed to the eurozone crisis as it has a huge
national debt of close to two trillion euros, over 126% of GDP.
The government has to pay more to service this debt if
investors perceive Italy as a risky option because they then
demand higher interest rates to buy Italian bonds.
The pressure on Italy's borrowing costs has eased since
Monti's emergency technocrat administration replaced
Berlusconi's government and passed austerity measures to put
Italy's public finances in order.
But the spread shot up by 28 points on Monday after Monti
announced at the weekend that he would quit when the 2013 budget
law is approved.
The announcement came after Berlusconi's People of Freedom
(PdL) party said it had stopped backing Monti's administration
and the media magnate said he would run for a fourth term at the
helm of government in upcoming elections.
Monti said that rises in Italy's bond spread should not
spark excessive anxiety, while stressing that they should not be
written off as unimportant either.
"The recent spread trends should be taken with a certain
degree of calm and coolness," Monti told Rai television.
"But we certainly should be very careful and sweep away
some myths, such as the one that says it is not relevant.
"Let's not treat the public as naive, because they are
not".
Giorgio Squinzi, the leader of powerful industrial
confederation Confindustria, agreed with Monti
"We are in the field of personal opinions," Squinzi said
when asked about Berlusconi's comments.
"The spread is important because it has a direct impact on
the cost of our public debt".
Pier Luigi Bersani, the leader of the Democratic Party and
the centre-left's premier candidate for elections that now look
set to take place in February, was critical of Berlusconi too.
"If only it were a con," said Bersani when asked about
Berlusconi's comments.
Industry Minister Corrado Passera joined in too.
"Is there anyone in the world who could think that the
spread is not important? That interest rates are not important?
That the credibility of the country is not important? To think
otherwise is to misunderstand the concept," said Passera.
"It is not the only (economic) indicator but it is an
important one".
Monti added on Tuesday that the spread has been talked
about so much during his emergency technocrat government that
his grandchild had been nicknamed "spread" at nursery school.
"Evidently, grandparents' defects have effects on their
grandchildren," he said.

© Riproduzione riservata

* Campi obbligatori

Immagine non superiore a 5Mb (Formati permessi: JPG, JPEG, PNG)
Video non superiore a 10Mb (Formati permessi: MP4, MOV, M4V)

X
ACCEDI

Accedi con il tuo account Facebook

Login con

Login con Facebook
  • Seguici su
X