Martedì, 16 Ottobre 2018

Rumours of debt downgrade continue amid uncertainty


Rome, March 27 - Rumours of a downgrade of Italian
debt continued to weigh on Italian financial markets Wednesday,
one day before Pier Luigi Bersani, the head of Italy's center
left, must report on his progress in forming a new government.
Bersani has said he will report on Thursday to President
Giorgio Napolitano on his progress in drumming up support to
form a government, but the situation does not look positive.
The uncertainty has weighed on Italy's main financial
market, where the FTSE-Mib fell by 0.92% to close trading
Wednesday at 15,353 points.
The spread between Italian and German debt, an indicator of
investor confidence in Italy's ability to deal with its ongoing
economic woes, widened to 350 basis points, up from Tuesday's
close of 321.6 basis points.
Moody's, a key international rating agency, last July
posted a rating of Baa2 on Italian debt, with a negative
That means that it would take little for Moody's to lower
Italian debt to "junk" status - particularly if the political
situation turned chaotic.
Bersani was handed a government-formation mandate last
Friday by the president after emerging from elections late
February with a majority in the House but not in the Senate,
leaving a hung parliament.
He has spent the past week meeting with parties in an
effort to forge a working coalition, even though that seems
increasingly unlikely given the refusal to compromise by the
anti-establishment 5-Star Movement (M5S) of Beppe Grillo.

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