January 27, 2021

The Italian risk premium soars to highs since 2013 after the announcement of Brussels

The Italian risk premium soars to highs since 2013 after the announcement of Brussels


Updated:

The Italian risk premium, which measures the differential between the Italian ten-year bond and the German bond for the same period, rose to 336 basis points today, the highest since March 2013 and after the European Commission (EC) will warn Italy that its Budgets are "worrying". The yield on the 10-year bond reached 3.77%.

In March 2013, the risk premium had skyrocketed due to the problems that arose after the February elections and the impossibility of finding a majority to govern.

These figures come after the European Commissioner for Economic Affairs, Pierre Moscovici, announced today in Rome to the Italian Government that its General Budgets for 2019 are "worrying" and delivered a letter asking for clarifications, to which Italy must now respond.

Italy sent to the EC on Monday a draft budget for 2019 that foresees an increase in deficit (to 2.4% of its gross domestic product) which, as the EU executive advanced before the accounts were presented, would not comply with European standards by deviating from the objectives agreed with Brussels.

The Milan Stock Exchange also opened lower and its selective index, FTSE MIB, lost 0.40% and after one hour it lost 1.24%.

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