Moody’s downgrade on November 17? Majority sources: “Our government bonds would become “junk”, and international investment funds would stop buying them”
The hypothesis is judged “remote” and “improbable”. But you never know. The date to mark on the calendar is November 17th when the agency Moody’s will express its opinion on Italy’s debt situation and its ability to repay the debt. Moody’s rating is particularly important. This is because while all agencies have some leeway to criticize Italy’s economic state without necessarily affecting the Investment Grade level, Moody’s has no margins. This means that it could further lower the judgment, which is already at the limit, bringing it to a state of Not Investment Grade. If this were to happen, very worrying scenarios would arise.
In fact, they explain in the centre-right majority, our government bonds would become “junk“, rubbish, and international investment funds would stop buying them. Not only that, the ECB could no longer support Italian government bonds and fail to purchase them. If Moody’s were to bring its rating from Baaa3 to Ba1, our country would fall among the high-debt and high-risk countries and investments in its government bonds would become speculative. The spread, i.e. the difference in yield between BTPs and the German Bund, could explode again.
Here because Palazzo Chigi And Ministry of Economy, despite the electoral appetites (in view of the European elections) of the parties, continue to talk about an almost armored maneuver, without amendments from the majority and to be approved very quickly (obviously with confidence). As confirmed by Massimo Garavaglia, president of the Senate Finance Commission and a moderate Northern League member very close to Giancarlo Giorgetti. “We hope it doesn’t happen, and it shouldn’t happen, but if there were a Moody’s downgrade it wouldn’t collapse the government, it would collapse the country”, say qualified centre-right sources. With the almost inevitable prospect that the much feared one will arrive in Italy troika Greece 2010 model or blood and tears measures both in terms of cuts in public spending and in terms of tax increases.
A specter that Meloni doesn’t even want to think about, also because it would almost certainly lead to the national emergency government requested by Carlo Calenda, and is insisting – together with the undersecretary Giovanbattista Fazzolari – to block, stop and stem any attempt by the government parties to touch the Budget Law. Compared to the drafts released so far, there could only be “small changes” in particular on pensions (Quota 103 but with an exit window that varies between public and private it would be the agreement reached in the majority on the formula for early exit for pension. The requirements of 62 years of age and 41 of contributions would not change but, once reached, private employees would have to wait 6 months for the check and public employees 9 months) and on the flat rate tax (in the new draft the increase is confirmed of the flat rate tax from 21% to 26% for short-term rentals). “The future of the country is at stake here, don’t joke. Carry on like this, straight, fast and without changes“, explain sources from Fratelli d’Italia. Fingers crossed that the economic-financial but also political earthquake does not come from Moody’s.
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