Renzi's post-recession goals for Italy may be derailed by Greece
http://www.ekathimerini.com/199275/article/ekathimerini/business/renzis-post-recession-goals-for-italy-may-be-derailed-by-greece
Renzi's post-recession goals for Italy may be derailed by Greece
BUSINESS 13:03
LORENZO TOTARO
With the risk of Italys borrowing costs rising amid Greeces standoff with creditors, Prime Minister Matteo Renzis budget targets may be out of reach.
Italian 10-year bond yields are about 47 basis points higher than the yearly average the government set in its April budget plan. Late on Thursday, Greece submitted a proposal for a bailout of 53.5 billion euros ($59.4 billion) to creditor institutions to stay in the euro. Should the bid fail, Italys debt-servicing may increase further, threatening its goals.
Theres a risk that the political fallout at eurozone and national levels turns out to be particularly destructive, said Marc Ostwald, a strategist at ADM Investor Services International Ltd. in London. Markets would naturally focus on Italy as being the most vulnerable.
Italian borrowing costs more than doubled at an auction on Friday. The Rome-based Treasury sold 6.5 billion euros of 366- day bills at 0.124 percent, up from 0.061 percent at the previous auction of similar-maturity debt June 10.