Italy is truly “too big to fail“. Apart from the downgrade, therefore, we do not risk default. The courtesy comes directly from Fitch, the rating agency which since yesterday has promised a new downgrade of our country, perhaps by a couple of notches.
Edward Parker, managing director of the agency, used reassuring words during the European credit outlook 2012: “The Italian default is certainly not our expectation. The country still has an A+ rating: if there was a possibility of bankruptcy we would have assigned a much lower rating. Italy has good fundamentals".
Despite the low growth, “the deficit is relatively low, the private sector is buoyant and the manufacturing trade balance is fairly close to equilibrium”.
And above all, “unlike other countries such as Spain and Ireland – concluded Parker – Italy has never had an unsustainable boom in credit to the private sector. The country is absolutely systemic for the eurozone, is really too big to fail: if this were the case, we would expect European intervention to prevent default”.
