Crédito y Caución (Atradius) | Despite the deep economic contraction in 2020, Italian business insolvencies decreased 29% year-on-year. The decline was mainly due to a temporary bankruptcy moratorium and fiscal support. However, with the expiry of temporary adjustments to insolvency law, it is expected that business failures will increase again in H2 of 2021. Looking at the cumulative insolvency growth between 2019 and 2021, Italian business failures are forecast to increase 4%, with further rising insolvencies expected in 2022
The S&P move reduces near term risks of Italy falling below investment grade that would have had implications on BTPs holdings by real money accounts and market pricing, somehow challenging the ECB efforts to keep financing conditions under control.
Israel Rafalovich | In the last few days a saying has frequently been heard in the corridors of the European Commission: “Spain is not Italy. With the new Spanish government it is now a Spanish spring.”
The twentieth anniversary of the creation of the ECB coincides with renewed financial tensions in the Eurozone. According to Caixa Research, the irreversability of the single currency requires ambitious advances in the European project.
Intermoney | The 5 Star Movement and La Liga finally reached an agreement to govern Italy on Thursday after more than two months of political deadlock. But it is still not known who will be prime minister.
In Sober Look, Marcello Minenna gives us a clue about a possible new breach in the euro’s structure. A few years ago (2011-2012), when the euro was going through its worst time, one of the consequences was that the central banks in the peripheral countries increased their debt position with TARGET2.
MADRID | The Corner | EU posts marginal growth stats, but the figures are indicative of slow pace of recovery.
Madrid | By Sean Duffy | Yanis Varoufakis has been causing quite a stir on his trip around Europe. The Greek Finance Minister will meet with his Italian counterpart on Tuesday, and both will be watching market reaction to proposals leaked by the Greek Government last night.
MADRID | The Corner | Markets were sad on Monday until Mario Draghi emerged and spoke his magic words. It seems markets feel more secure every time the president of the ECB takes the lead and assures everything will be alright. Investors felt more confident after his intervention at the European Parliament’s Economic and Financial Committee. However, despite his speech regarding new potential actions in monetary policy, he also highlighted the need of deep structural reforms by the Members States. According to market watchers at Link Securities, sooner or later, “such reforms will have to be faced by Italy or France’s government, because it is necessary to make them competitive and able to grow again.”
MADRID | The Corner | The European Commission said on Tuesday it had found no serious fault with eurozone member states’ 2015 budget plans, clearing France and Italy after they made last-minute changes to meet EU demands. The budget review covered all 18 eurozone countries, with the focus on struggling France and Italy after Brussels told them that their original plans fell well short of what was required to meet European Union norms.