Martedì, 25 Settembre 2018

Spread widens to 260 points amid political fear


Milan, August 27 - Milan's top stock exchange
joined its European counterparts in reporting deep losses
Tuesday as investors worried about political crises.
The FTSE-Mib, which fell by 2.10% on Monday, shed another
2.34% on Tuesday to close at 16,579 points amid fears over the
future of Italy's fragile coalition government.
The most pressing concern is that ex-premier Silvio
Berlusconi, who founded the centre-right People of Freedom Party
(PdL) political party, is in a fierce dispute with Prime
Minister Enrico Letta's centre-left Democratic Party (PD) over
the future of a despised housing tax which the PdL has vowed to
However, Finance Minister Fabrizio Saccomanni has said the
country cannot afford to forgo the revenues from the IMU.
A decision on the tax is slated for Wednesday.
Meanwhile, the parties are also clashing over Berlusconi's
future following his conviction on fraud charges.
The PdL on Sunday warned that it would bring down the
Italian government and force new elections if PD party members
vote to expel Berlusconi from his Senate seat over his
first-ever binding conviction for tax fraud.
At the European - and global - markets level, concerns are
growing over possible international intervention in the dispute
in Syria and what the might mean for energy prices and thus, the
nascent economic recovery around the globe.
The uncertainly added to pressure on Italian bonds and
helped to widen the spread between Italy's 10-year bond and its
German counterpart.
That closed at 260 basis points Tuesday, up significantly
from Monday's close of 249 basis points.
The yield on Italian 10-year paper closed at 4.44%, up from
the 4.38% one day earlier.
The spread between lending rates in the two countries is
seen as an indication of investor faith in the Italian economy
and its ability to cope with a lingering recession.
On other European markets, Frankfurt's DAX dropped by a
shocking 2.28% to close at 8,242.56 points, while Paris's CAC 40
shed fully 2.42% to close at 4,067.13 points, and Spain's IBEX
35 plunged by 2.96% to 8,394 points.
In London, the FTSE index of leading British shares
suffered least on the day, losing only 0.79% to close at

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