On Wednesday in Russia on a state visit to the Prime Minister of Italy, Giuseppe Conte — head of government populists that after the summer elections, has formed a Pro-anti-establishment “five star Movement” and anti-immigration party “League”. In the morning in Moscow Conte held talks with Prime Minister Dmitry Medvedev, and later will meet with Russian President Vladimir Putin.
In the course of negotiations Conte intends to ask Putin for financial assistance — this order gave the Prime Minister the leader of “Northern League”, Deputy Prime Minister Matteo Salvini, told La Stampa sources close to the government of Italy.
The idea of the Italians, Russia could start buying government bonds of Italy after the market will cease to support the European Central Bank.
The ECB, recall, 2015 is buying bonds of governments of the Euro area within a record in the history of quantitative easing, de-facto financing deficits of the EU budget through money emission.
In 2017 for these purposes monthly “published” by 80 billion euros since October 2018 amount was reduced to 15 billion, and since January, operations will cease altogether.
Without ECB support for Italian bonds is rapidly getting cheaper: two years ago in Rome could occupy for 10 years at 1.5% per annum, now those loans cost of 3.54%.
Moreover, the Italian paper fall faster than the other: difference in yield with German bonds reached a 5 year high.
Oil on the fire adds to the government’s plans to increase the budget deficit from 1.8% to 2.4% of GDP, to cover which will be debt-financed. The European Commission earlier in the week refused to approve such a project, for the first time in history demanded from Eurozone countries to revise the parameters of public finances.
International rating Agency Moody’s downgraded Italy’s rating to Baa3. Now he’s only one notch above “junk” level.
In response to the support of the Kremlin in Italy, apparently, are ready to lobby for the easing of pressure on Russia.
At a press conference before the visit to Moscow the Comte proposed to restore the membership of Russia in the “big eight” and noted the “important role” of the Kremlin “in all international crises.”
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