|
|
        
|
|
Italian report
by Euro Reporter
2012-07-15 09:44:32 |
| Print - Comment - Send to a Friend - More from this Author |
   
 |
Italy shakes off downgrade, but fears mount
Italy dodged a potentially unlucky Friday the 13th, easily selling a batch of new three-year bonds in a closely-watched auction that came just hours after Moody’s Investors Service cut the country’s credit rating by two notches. But high borrowing costs, jitters over Spain and Greece, and growing signs that scandal-plagued former Prime Minister Silvio Berlusconi may be plotting a comeback could make any relief short-lived. “Italian government debt remains under considerable pressure. Practically nothing was done at the last European Union summit to help shore up the Italian sovereign,” said Nicholas Spiro, managing director of London-based Spiro Sovereign Strategy, an advisory firm, referring to a late June meeting of European leaders.
Italy’s Treasury sold 3.5 billion Euros ($4.3 billion) of new three-year bonds. The sale produced an average yield of 4.65%, down from a level of 5.30% in a sale of three-year securities last month. Italian yields have retreated somewhat since the EU summit. Italian bonds sank early Friday after Moody’s cut the country’s credit rating to Baa2 from A3 and left Italy on negative outlook. That drop in price likely helped ensure Italy’s Treasury got the issue out the door, said Nick Stamenkovic, fixed-income strategist at RIA Captial in Edinburgh. A generally risk-positive environment in the wake of a less dire-than-feared round of Chinese economic data also helped, analysts said. Italy’s borrowing costs remain high by any measure. The yield on the 10-year Italian government bond (IT:10YR_ITA) traded at 5.97%, up 0.08 percentage point, according to electronic trading platform Tradeweb.
The credit-default-swaps market had little lasting reaction to the data. The cost of insuring Italian government debt against default using the instruments initially rose, but soon fell back in the wake of the auction results, according to data provider Markit. “Italy is more likely to experience a further sharp increase in its funding costs or the loss of market access than at the time of our rating action five months ago due to increasingly fragile market confidence, contagion risk emanating from Greece and Spain and signs of an eroding non-domestic investor base,” Moody’s said, in a statement. The ratings firm also noted that the country’s near-term economic outlook has deteriorated as reflected by weaker growth and higher unemployment. That will make it harder for Italy to meet its deficit targets, which could serve to further erode market confidence.
********************************************************
Italy cruise wreck victim's husband dives to lay plaque
The husband of one of the victims of the Costa Concordia cruise ship wreck off Italy dived Saturday to lay a plaque at the spot where the vessel hit rocks with the loss of 32 lives. Elio Vincenzi, whose wife Maria Grazie Trecarichi is still missing, dived 25 metres (80 feet) down to leave the plaque in the rocks on Giglio Island, close to where the ship still lies on its side six months after the tragedy. "It was very emotional," Vincenzi said afterwards. "There, under the sea, I was with her, I will never forget her."
The plaque carries two photographs, the name of his wife and the dates of her birth and death. Vincenzi made his dive, accompanied by Giglio's deputy mayor Mario Pellegrini, the day after a special memorial mass was held in the hilltop church on the island along Italy's northwest coast. "It was human stupidity that took her away, not the sea that we both loved," Vincenzi told reporters earlier.
He said his dive would be "an embrace for my wife and one I will do every year as long as my health allows." Pier Luigi Foschi, the chief executive of ship owner Costa Crociere, Europe's biggest cruise operator, was also at the commemoration and he later embraced Vincenzi. Costa Crociere is planning to refloat the Costa Concordia and tow it to a port in Italy for scrapping.
********************************************************
Berlusconi maintains suspense over comeback
Italy's former Prime Minister Silvio Berlusconi, forced out amid sleaze claims as the economy crashed last year, failed to show at a meeting where he had been tipped to announce a comeback. Angelo Alfano, new leader of Berlusconi's People of Freedom Party, said he had another unspecified engagement, while other sources cited security fears amid the presence of a few Libyan demonstrators at the late Friday gathering. But the Corriere della Sera daily speculated that the underwhelming effect of an announcement before some 300 elderly supporters especially bussed in and fatigued by a Rome heat wave was the real reason for Berlusconi's no-show. Even so, Berlusconi's fans seem convinced that their discredited hero will sooner or later -- perhaps at a grand meeting after the summer holidays -- declare that he will lead his PDL party into parliamentary elections planned for April next year.
The 76-year-old media magnate, one of the richest men in Italy, has gone on a diet and shed several kilos, said one of his favourite journalist, Bruno Vespa. "For those who know him, it's the sign that he will be travelling around a lot from the autumn and will reappear on television," Vespa wrote Saturday on the website Quotidiano.net. "And if he returns to television, that means he will return to politics," Vespa said, adding that Berlusconi would consider 18 years of political commitment wasted if he did not try to revive his party's fortunes. "There is a major wave of support for Berlusconi to put forward his candidacy again," party leader Alfano said Wednesday.
"Many people are asking him to do this, and I am one of them... I think in the end he will decide to come back." Since handing over to a coalition government headed by Mario Monti to get Italy out of its financial mess, Berlusconi has said several times that he wanted Alfano, 41, his former justice minister, to succeed him. But press reports say he is beavering away behind the scenes to reshape the party, which suffered a massive setback in May local elections. The reports say he fancies a name change for the party, probably returning to Forza Italia (Go Italy), as his movement was called when he entered politics in 1994, and is envisaging a joint ticket with a woman. One woman he does not want is Nicole Minetti, 27, a regional councillor from Lombdardy and Berlusconi's former dental hygienist, who is accused of supplying a host of young females for the parties he held while in office.
Euro Euro-zone Ovi+Europe euro-reporter Italy Europe Ovi EU |
|
| Print - Comment - Send to a Friend - More from this Author |
|
|
|
Newsletter
Subscribe
Contact
Search
