After Mario Draghi's not reassuring words, the ECB's monthly bulletin arrives mercilessly, the last of 2018, confirming that Frankfurt considers the level of deviation of the Italian public accounts "particularly worrying", which is causing, among other things, a worsening the debt prospects of the entire Eurozone. “Compared with last September's financial year – the document from the European Central Bank writes -, the outlook for the general government deficit in the euro area for the next two years has worsened. The highest deficit it is partly the result of a marked deterioration in Italy's projected budget balance, following the fiscal expansion included in the budgetary planning documents which would violate the commitments made under the Stability and Growth Pact (SGP)”.
The intervention by the ECB, however, is dated 12 December and therefore prior to the corrections then made to the Budget Law, agreed with the European Commission in Brussels, which among other things reduce the estimates on the deficit/GDP ratio. For the ECB, in any case, “it is necessary to continue the efforts to restore public finances in full compliance with the PSC. Particularly in the case of countries with high levels of debt, further consolidation efforts are essential to impart a solid downward trend to the incidence of debt, given that high debt makes these States vulnerable to any future episodes of economic downturn or instability of the financial markets”.
“In the light of this – the ECB therefore argues – the fact that compliance with the PSC is weaker in the countries most vulnerable to shocks and is particularly worrying the circumstance that the largest deviation from the commitments undertaken is found in Italy, a country in which the ratio between public debt and GDP is remarkably high”. The Stock Exchange, which reopened after a three-day break, is also feeling the effects of this position by Frankfurt: after the publication of the Bulletin, the FtseMib accelerated downwards, losing more than 1% despite the debut boom of Juventus and Amplifon in the main basket.
