Domenica, 21 Ottobre 2018

Letta warns feuding parties not to forget meltdown danger


(see related story on Bonino)
Rome, August 9 - Premier Enrico Letta on Friday
warned the feuding parties supporting his left-right government
that the threat of Italy facing a financial meltdown has not
been completely averted.
Letta's already fragile government has been hit by rising
tension between his centre-left Democratic Party (PD) and
Silvio Berlusconi's People of Freedom (PdL) party after the
supreme court upheld a tax-fraud conviction against the
ex-premier last week.
Many commentators see the coalition in danger of
collapsing soon and Foreign Minister Emma Bonino admitted Friday
that the challenge the government faced amid the turmoil was
close to "impossible".
Letta reminded the parties of the situation two years ago,
when Berlusconi was forced to step down as premier at the height
of the eurozone crisis to make way for Mario Monti's emergency
technocrat administration.
At the time the cost of servicing Italy's huge public debt
soared, with the spread between the 10-year Italian bond and the
German benchmark reaching over 500 basis points and the country
looking in danger of a Greek-style meltdown.
The spread, a key measure of investor confidence, dropped
after Monti introduced a series of tax hikes and spending cuts
to improve Italy's public finances before Letta's executive took
power in April.
The spread has remained steady since last week's verdict,
a possible sign the money markets do not expect the government
to collapse immediately.
But Letta warned that this may not remain the case if the
turbulence escalates further.
"I hope the Italian political world does not forget the
importance of interest rates and the spread," Letta told a press
"I have the impression that it was talked about a lot in
2011, but then, as often happens in Italy, it wasn't digested
and it wasn't talked about any more.
"Confidence has returned to the markets, as shown by the
spread. This confidence should encourage us to press on, not to
Letta stressed, however, that he did not think the
government was an unsteady as it might look.
"You know that we are used to sailing on a ship in storms,
waves and billows," he said.
"The ship is proving to be more solid that our critics

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