Analysts at Danske Bank note that over the weekend, there were calls from Italy for the ECB to prolong the QE programme.
Key Quotes
“The point was made by Italian cabinet Undersecretary Giancarlo Giorgetti, who is a prominent member of the League, the government coalition partner. We doubt the ECB has any plans to do so, possibly setting the new Italian government up for a clash with the ECB later in the autumn. This will be in addition to a fight with the EU commission over the country’s budgetary stance.”
“On this issue, there were fresh reports that the government plans significant new spending on infrastructure in the wake of the Genoa bridge collapse, boosting the deficit to 1.6% of GDP instead of the 0.8% of GDP planned by the previous administration.”
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