Monti says Berlusconi's tax-refund pledge is 'poisoned bait'
Outgoing premier blames predecessor for sharp climb in spread
05 February, 12:32
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(ANSA) - Rome, February 5 - Monday's convulsions in the
Italian financial markets, including a jump in borrowing costs,
are the result of irresponsible election campaign promises by
Silvio Berlusconi, outgoing Premier Mario Monti said Tuesday.Monti described ex-premier Berlusconi's pledge to eliminate the hated IMU housing tax and return four billion euros of IMU payments made in 2012 if the centre wins the February 24-25 election as "poisoned bait" for Italians.
"It is poisoned bait, because then there would be financial consequences," Monti, who is standing for office on a reform platform backed by centrist parties, said in a video chat posted on the website of La Stampa newspaper.
In early trading Tuesday, the spread between the 10-year Italian bond and the German benchmark yo-yoed after climbing sharply Monday.
The spread between Italian and German bond yields - a key measure of Italy's borrowing costs and of investor confidence in the country - rose to 293 basis points, although it eased back to 287 points with a yield of 4.48%. On Monday, the spread jumped by over 20 points to close at 285 basis points while Milan's main financial market plunged by fully 4.5% in trading.
Some analysts blamed investors' fears over Berlusconi's intentions to unravel Monti's reforms, which have been popular with international financial markets.
But Berlusconi claimed that markets were more upset about problems at Italy's third-largest bank, the scandal-plagued Monte dei Paschi di Siena (MPS).
"The stock market goes down because there is a big scandal of the Monte dei Paschi di Siena," said Berlusconi, founder of the centre-right People of Liberty (PdL) political party.
The MPS scandal has given Berlusconi a political weapon as MPS has traditionally been linked with Italy's centre-left Democratic Party, the PdL's main opponents.
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