Italy an uncertainty like Brexit-Draghi

(ANSA) - Frankfurt, October 25 - European Central Bank President Mario Draghi said Thursday that Italy was a factor of uncertainty for the eurozone's economic outlook, along with Brexit and the threat of an international trade war.
    He added, however, that he was "hopeful an agreement will be found" between Rome and Brussels over Italy's draft budget plan.
    The European Commission has rejected the plan, which sees Italy running a deficit of 2.4% of GDP next year as part of an expansive budget aimed at boosting growth, and told Rome to rewrite the package within three weeks.
    The government has said it does not intend to change the budget.
    The pressure on Italy's bonds has intensified amid the tension between Brussels and Rome, with the spread between the 10-year BTP and the German Bund over 300 basis points.
    "I don't have a crystal ball, (I don't know) if it will be 300, 400 (points) or anything else," he said.
    "These bonds are certainly in the portfolios of the banks. If they lose value, that hits the banks' capital.
    "If you ask me what to do about the banks given the rise in the spread over the last six months, an initial response is to reduce the spread and not put into doubt the institutional framework that supports the euro".
    Draghi said there was no risk of the ECB's approach changing to accomodate the Italian government's fiscal policy.
    "Financing deficits is not in our mandate," he said.