Analysts at Danske Bank note that yesterday evening, EU Commissioner Moscovici and EC Vice President Dombrovskis sent a letter to Italian Finance Minister Tria for clarification of the ‘obvious significant deviation’ of the stability and growth pact in the 2019 budget that they submitted on Monday.
Key Quotes
“This is the first official response from the EU to the worrying Italian budget. Italy has until Monday at noon to reply to the letter, but given the letter and the proposed budget, there is no reason to turn positive on Italy just yet, which will weigh on the BTPs. Further to this, ECB President Draghi is said to have expressed that there is no leeway towards Italy on the European rules during the EU summit yesterday.”
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