Budget, Padoan: “The spread rudely reminds us that we must reduce our national debt”

Rome – The sudden increase in the spread between the yields on Italian government bonds and German ones – the infamous “spread” that has jumped above 200 basis points since yesterday, setting a record since 2014 – “rudely reminds us that a country with high debt cannot afford not to work towards its decrease.” Speaking at the presentation of the 2016 results of the State Property Agency, the Italian Minister for Economy Pier Carlo Padoan, links the rise in the interest rate for Treasury Bonds to the market fears for a remarkable sovereign exposure. In order to stop this upward pressure, therefore, the Minister ensures that “in the actions of the government” the objective of decreasing the national debt is “central”, as asked by the European Commission as well.

The indication given by Padoan is an indirect confirmation that the government is working to give concrete form to the promises contained in the letter sent last week to Commissioners Valdis Dombrovskis and Pierre Moscovici, indicating the areas of intervention to find in excise duties, indirect taxes and in cuts to public expenditure the 3.4-billion-euro correction to the budget requested by Brussels.

“The country and the government comply with the rules,” claims Padoan announcing that because of it, “in a context in which the dialogue with the EU is ongoing,” the government will be able to implement “many additional resources” for the emergency created by the earthquake. “The country has sought and received additional margin of expenditure which are going to be invested in anti-seismic building” Paodan points out, adding that “other resources will be deployed.” All of this in spite of the additional economic measures which will be made anyway, suggests the Minister.