The US-based rating agency, Moody’s Investors Service, is out with its assessment of the current political situation in Italy, with the key headlines found below.
Recent developments have no bearing on the decision to put Italy’s ratings under review for downgrade.
The key driver of rating action was the risk of a material weakening in fiscal strength.
Had expected Five Star and Lega to form a government over the course of this week.
New elections will likely produce similar results to the elections in March.
Sovereign rating would likely be downgraded if we were to conclude that whoever emerges as the next government will pursue fiscal policies that will be insufficient to place the public debt ratio on a sustainable, downward trajectory in the coming years.
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