Italian bond yields jumped on the unprecedented move by the European Union executive which was exerting for the first time a power obtained during the 2013 sovereign debt crisis, to send back a budget of a euro zone country that violates the rules.The Commission believes Italy’s growth assumptions are overly optimistic making the debt reduction plan questionable. “We see no alternative”, he added.The EU executive now expects Italy to send a revised plan that was in line with the decision of finance ministers from July and to cut its structural deficit, which strips out the effects of the economic cycle and one-time spending, by 0.6 percent of GDP.”The Italian Government is openly and consciously going against the commitments it made”.Hong Kong’s Hang Seng fell 0.3 percent while the Shanghai Composite Index retreated 0.6 percent.The commission called Italy’s deviation from the rules “unprecedented”.Italy’s economy is still some 6pc smaller than it was at the start of 2008, hobbled by a slew of long-standing problems, including a national debt mountain at around 131pc of GDP – the second-highest in Europe after Greece. One hundred basis points of the spread between Italian ten-year government bond yields compared to their German equivalents is linked… Read full this story
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