Falling interest rates mean
savings of almost nine billion euros for the Italian budget this
year, according to government estimates.
Previous budget estimates made last September by former
finance minister Fabrizio Saccomanni provided for 91.5 billion
euros in interest rate payments in 2014.
However, his replacement Pier Carlo Padoan now predicts
interest payments will come in at about 82.55 billion euros, and
he anticipates savings of 15 billion euros on 2015 interest
payments.
The latest estimates come the same day as the latest
government bond auction, which saw the Treasury sell 7.5 billion
euros' worth of one-year BOT State bonds at an average rate of
0.589% - a new all-time low.
The previous low of 0.592% was set at an equivalent auction
last month.
The country's borrowing costs have been falling since
Premier Matteo Renzi unseated his Democratic Party colleague
Enrico Letta in February and took the helm of government
promising to revive the economy and reform the country's slow
and expensive political system.
Italy risked a Greek-style financial meltdown late in 2011
when the spread between the interest rates Rome was forced to
pay on its 10-year bond in comparison with the ultra-safe German
equivalent went over 500 points with yields on Italian paper
above 7%.
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