The government said Tuesday that
it was confident Italy's bond spread will fall from its current
high level.
"The spread will come down. I'm convinced it will come down,
unless there is someone who is speculating to damage Italy,"
Deputy Premier and Interior Minister Matteo Salvini said.
"But this government will not allow that".
The recent rise in the yields on State bonds has been linked
to concerns about the government's budget plan for 2019, which
sees Italy running a deficit of 2.4% of GDP next year.
The European Commission may open an infringement procedure
over the plan on the grounds that it would breach the Stability
and Growth Pact.
Premier Giuseppe Conte's government has refused to make
significant changes to the package, arguing an expansive budget
is needed to finance key pledges and boost growth.
The spread between Italy's 10-year BTP bond and the German
Bund climbed to 336 basis points in early trading on Tuesday
before easing back below the 330-points mark.
The spread, an important measure of investor confidence and
gauge of Italy's borrowing costs, closed at 322 points on
Monday.
Deputy Premier and Labour and Industry Ministry Luigi Di Maio
said the turbulence on the financial markets will calm down when
the European Commission announces its decision on Italy's budget
plan for 2019.
"The market tension does not help credit (but) once the
Commission has made its decision, the tension will fall," 5-Star
Movement (M5S) leader Di Maio said.
"We are convinced of this. We are not putting ourselves in
the hands of destiny. We are going forward on the basis of
precise convictions".
Economy Minister Giovanni Tria, meanwhile, said "obviously,
I'm worried" when asked about the spread by reporters in the
Lower House.
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