“Without agreement, risk of increased spread” – QuiFinanza

luis de Guindos, The Vice President of the European Central Bank is pushing for an agreement on… Stability Charter.

“Failure to reach an agreement between EU countries” could create further uncertainty which could lead to further increases in yields and spreads. (footnotes), “Especially in countries that are unable to adhere to the rules of the Charter,” he said at the press conference to present the financial stability report.

Stability and pressure pact of the European Central Bank

According to the central bank governor, in fact, “even if last year we saw a significant increase in interest rates” on government bonds, the differences between countries,spread out “They have been quite stable and in the latter stages we have seen some reduction in spreads.” “The good news is that the situation in government bond markets is positive.” But the scenario of failure to agree on a review Stability Charter De Guindos emphasized that growth could create more uncertainty that may be reflected in rates and spreads.

the pressure Expressing moderate optimism, Economic Affairs Commissioner Paolo Gentiloni also said: “I have full respect for the positions of all political forces in the various European countries” in the ongoing discussions on the new Stability Pact, at the end of the meeting. Press conference on the “European Semester” yesterday in Strasbourg. “I see that the debate generates continuous and very intense communications between different governments, and not only between France and Germany; The Italian government is also heavily involved in these discussions. Therefore – Gentiloni added – I remain optimistic that an agreement can be reached. We are not there yet, but I think we can get there, and there is a commitment from everyone, especially the Spanish Presidency of the Council of the European Union, to get there.

“Without an agreement, the spread of the disease may increase”

at the same time, Germany, In the voice of the German Finance Minister, Christian Lindner, He insists on the need to ensure the unification and sustainability of accounts with reform. He said that Franco-German cooperation “is making progress, but things have changed with the rise in rates.” He explained during a conference on inflation and democracy that compared to last year, when “we were only discussing increasing investments, today we are talking much more about debt sustainability.”

De Guindos also commented on Moody’s decision to improve Italy’s rating outlook to ‘stable’, describing it as a ‘positive’ development. In the last hours, in fact, a surprise arrived from the rating agency, the most severe among the “three sisters”, which improved the outlook for Italy’s rating to “stable” from “negative”.

Italy, Moody’s surprise

“there The decision to change outlook “It reflects the stability of the country’s economic strength prospects, the health of its banking sector and the dynamics of public debt,” the agency explains. the Economic prospectsIn the medium term, it continues to be supported by the implementation of the National Recovery and Resilience Plan (PNRR), while risks to energy supplies have decreased, partly due to strong government policy actions. Improvements in the banking sector, which Moody’s expects to be strong, also support economic growth. In contrast, the expectation of positive and sustainable GDP growth in the coming years reduces the risk of a significant and rapid deterioration in financial strength.

Spread down

As Moody’s reported some fragility, Especially in light of the limited institutional capacity to achieve structural improvements in growth as a result of implementing the reforms and investments envisaged in the reform plan. PNRR. Moreover, since widespread and sustained fiscal consolidation will be a political challenge, the agency believes that Italy’s debt burden will remain very high. Reducing its financial strength.

Moody’s decision, which showed his decision immediately Positive effects: In fact, in the past few hours, the spread, a thermometer of a country’s risks, has moved downward, reaching… 172 points.