The Italian government has shown that it is still able to borrow money at affordable rates of interest, despite getting a further thumbs down from the Moody’s ratings agency.
Just hours after a further downgrade from Moody’s, Rome was able to sell 5.25 billion euros worth of government bonds.
Friday’s cut by the US agency to Baa2, to just two notches above junk status, was criticised by the Italian Industry Minister Corrado Passera. He said: “The Moody’s judgement is altogether unjustified and even misleading because it does not take into account all the efforts that our country is making.”
International demand for Rome’s bonds is low but Italian banks are buying them.
The bulk of those sold on Friday are due to mature in three years time. The interest rate that Italy had to offer on those was down at 3.6 percent in May, it hit 5.3 percent in June and has now slipped down to 4.65 percent.
Moody’s said it was lowering Italy’s sovereign debt rating because of doubts over the country’s long-term resolve to push through much-needed reforms – with the economy forecast to shrink two percent this year – and fears about Spain’s problems spreading to Italy.
The agency praised Prime Minister Mario Monti’s commitment to fiscal reforms and structural consolidation. But warned it could again cut the country’s marks if the next Italian government failed to continue along this path.
“The negative outlook reflects our view that risks to implementing these reforms remain substantial. Adding to them is the deteriorating macroeconomic environment, which increases austerity and reform fatigue among the population,” it said.
“The political climate, particularly as the spring 2013 elections draw near, is also a source of implementation risk.”
The European Commission, which has so far mostly refrained from commenting on rating actions on individual eurozone countries, queried the timing of Moody’s downgrade while backing the steps Italy has taken address its structural weaknesses.
“I do think one can legitimately and seriously question the timing of it, whether the timing was appropriate,” Commission spokesman Simon O’Connor told a regular briefing.
Copyright © 2014 euronewsMore about:
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2International tv news | euronews: European and International tv news bulletin
- 3Two container ships collide on Egypt’s Suez Canal | euronews, no comment
- 4Turkish president Erdogan unveils his new palace of a thousand rooms | euronews, world news
- 5Revealed: Europe’s capital cities where it’s hardest to be a foreigner | euronews, world news
- 6European Union News | euronews: latest breaking news and headlines about European Union
- 7Sweden becomes first European nation to recognise Palestine | euronews, world news
- 8All you need to know about the Ebola virus | euronews, world news
- 9How nasheeds became the soundtrack of jihad | euronews, world news
- 10What to expect in “The World of Ice and Fire,” George R.R. Martin’s new book | euronews, world news
- 11Where is the best place in Europe for women? | euronews, world news
- 12Philippe Starck: ‘Words like longevity and legacy have become almost avant-garde’ | euronews, the global conversation
- 13Ebola: Six new suspected cases in Spain | euronews, world news
- 14Learning through “serious games” | euronews, learning world
- 15International breaking news | euronews online world breaking news in video
- 16US says ISIL makes $1 million-a-day selling oil – even to enemies | euronews, world news
- 17Mike Tyson: ‘You learn humbleness when you get older in life’ | euronews, the global conversation
- 18International news | euronews, latest international news
- 19Sweden becomes first EU country to recognise the Palestinian State | euronews, world news
- 20US delivers technical aid to Ukraine but warns over security | euronews, world news
Wires > Business
- 07:07 CET Thousands denounce HSBC board member’s likening of Hong Kong…
- 07:02 CET Kurds’ battle for Kobani unites a people divided by borders
- 06:42 CET Australian minister visits Fiji amid diplomatic thaw
- 06:23 CET Beijing bans Halloween costumes on subway ahead of APEC
- 06:05 CET U.S. Congress to revisit Islamic State war debate after election
- 05:08 CET Japan coalition Komeito official says hard to raise sales tax as…
- 05:05 CET Obama urges progress in Myanmar ahead of rare roundtable
- 04:23 CET China says nets 180 graft suspects in overseas manhunt