Giorgia Meloni and Christine Lagarde
ECB, Lagarde is tough on Italian public finances. Nadef “rocked” the Eurotower
Not just the continuous rate increase which is causing serious difficulties Italynow from ECB there also comes a rebuke to the executive on huge debt and the consequences. For Christine Lagarde Italy led by the Meloni government – we read on financeonline – it has the spread it deserves. Six sources close to the European Central Bank told Reuters this, adding that, according to the Eurotower, the value of the BTP-Bund spread would be justified by the estimates of the Italian deficit contained in the Nadef. With the update note to the Def published at the end of September, the Meloni government has, in fact, the outlook for the deficit-GDP ratio has been revised upwards of Italy for 2023 at 5.3%, compared to the 4.5% previously expected, and at 4.3% for 2024 compared to the 3.7% previously expected.
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A reason, for ECBmore than enough to justify the recent run in the BTP-Bund spread which, today, it approached the 210 basis point threshold. However, the sources in Frankfurt did not only come with reproaches to the Meloni government. In fact, they have exclusively told the Reuters agency that the ECB could at this point reconsider the option of pulling the plug on PEPP (pandemic QE) ahead of expectations. The BTP-Bund spread immediately rose to within a whisker of that danger threshold that the strategists of Morgan Stanley they predicted that it would be affected, in general, by the end of this year, but not really immediately.
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