The public finance interventions of the Italian government have convinced the markets, as demonstrated by the drop in yields that our country has to pay on its ten-year issues. The Vice President of the European Commission writes, Olli Rehn, in a letter addressed to the European finance ministers and other authorities, including the president of the ECB Mario Draghi, to take stock of the last Ecofin meeting.
“Yields on 10-year Italian bonds which were 2011% in November 7,3 – continues Rehn – have fallen below 5% since March 2012, because the markets believe in the budget choices made. A fall of 100 basis points in government bond yields allows savings of 3 billion, just in the first year”.
In the text, the vice president recalls that the EU Commission considers the recovery efforts of the various countries from a structural point of view, i.e. net of the cycle and therefore "if growth decreases, a country may be given more time to correct the excessive deficit , provided that it can demonstrate that it has carried out the required structural adjustments”.
It is difficult not to link this concession to the announcement made yesterday by French premier Jean-Marc Ayrault, who admitted that France will not be able to reduce the deficit to 3% by 2013 as requested by the Union.
