Investors love what Italy's new economy minister is saying

Will Italy's new government blow up its budget? No. And could it leave the euro? No.That's according to Italy'...

Posted: Jun 11, 2018 2:56 PM
Updated: Jun 11, 2018 2:56 PM

Will Italy's new government blow up its budget? No. And could it leave the euro? No.

That's according to Italy's new economy minister, Giovanni Tria, who outlined plans for the economy and government spending that were being cheered by investors on Monday.

Markets panicked late last month, sending Italian shares and bond prices plunging, at the prospect of a new populist government running up big debts and clashing with the eurozone's budgetary rules. There was even talk that Italy could exit the euro currency.

Tria told the Italian newspaper Corriere della Sera that there was "no discussion about leaving the euro" among the new government. He also said he would focus on cutting debt levels.

The Italian government confirmed the accuracy of the quotes to CNNMoney.

The euro strengthened in reaction to the comments on Monday and Italy's benchmark stock index shot up by as much as 2.5%, with banks leading the way. Shares in UniCredit and Intesa Sanpaolo surged 5%, while Banco BPM and UBI Banca were up 3%.

Yields on Italian government bonds also dropped as investors showed more confidence that the country will be able to manage its heavy debt load.

Two major populist parties, the Five Star Movement and the far-right League, emerged from months of political turmoil to form a government in early June.

The parties had already dropped some of their most explosive campaign pledges, such as calling for a referendum on whether Italy should abandon the euro, or leave the European Union. But investors were still worried about planned tax cuts and a spending binge.

"Investors will be pleased to see signs of a conciliatory approach," said Chris Beauchamp, chief market analyst at IG.

Years of stagnation and a lack of reform have pushed Italy's government debt above -2 trillion euros ($2.3 trillion), equivalent to more than 130% of annual economic output. But Tria said the new government would keep spending under control.

"The budget will be fully consistent with the goal of continuing on the road of reducing the debt to GDP ratio," he told Corriere della Sera. "The goal is growth and employment. But we are not aiming to relaunch growth through deficit spending."

Analysts had also been concerned by campaign pledges to roll back pension reforms. But Tria said in the interview published Sunday that his government would continue to study the issue.

"I think our pension legislation can be improved, but it will be done with attention to sustainability," he said. "We will study improvements, knowing that we can't improvise on these matters."

Tria said the government would work with its European counterparts on programs that would benefit both Italy and its neighbors.

"The goal is to enforce the national interest that coincides with Europe's general interest," he said. "I don't think the dialogue is impossible. It's all about restoring mutual trust."

-- Valentina DiDonato contributed reporting.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 295357

Reported Deaths: 5305
CountyCasesDeaths
Marion40796844
Lake25864448
Allen17025289
Elkhart16389209
St. Joseph16125217
Hamilton12225163
Vanderburgh9218112
Tippecanoe807627
Porter770176
Johnson5971161
Hendricks5719154
Vigo563274
Monroe519846
Clark486774
Delaware4721103
Madison4651119
Kosciusko437339
LaPorte436792
Howard321375
Warrick309072
Floyd301177
Bartholomew296262
Wayne292261
Cass291231
Marshall283642
Grant254147
Noble244246
Hancock238949
Henry234136
Boone231754
Dubois229230
Dearborn204629
Jackson200033
Morgan196043
Gibson171622
Knox170715
Clinton170420
Shelby170453
Lawrence169246
DeKalb168428
Adams160019
Miami150414
Daviess149143
Wabash148118
Fayette141233
Steuben139713
LaGrange135127
Jasper134911
Harrison134624
Montgomery127926
Whitley127410
Ripley121414
Decatur119842
Posey116613
Putnam115626
Wells115427
Huntington115210
White115221
Randolph114619
Clay111821
Jefferson110314
Scott97918
Greene97553
Jay93012
Starke87021
Sullivan85515
Perry80521
Spencer7957
Jennings79114
Fulton78717
Fountain7257
Washington6966
Carroll65313
Orange64828
Franklin63525
Owen5676
Vermillion5662
Newton53412
Parke5296
Tipton52826
Blackford50011
Rush5006
Pike49618
Pulaski36410
Martin3425
Brown3153
Benton3101
Crawford2711
Union2551
Switzerland2453
Warren2272
Ohio2227
Unassigned0265

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 351419

Reported Deaths: 5996
CountyCasesDeaths
Franklin48389665
Cuyahoga34096734
Hamilton28674371
Montgomery19082225
Butler14138144
Lucas13446406
Summit12431309
Stark8122197
Warren770375
Mahoning6772299
Lake625466
Lorain590297
Clermont541946
Delaware521435
Licking506275
Fairfield505163
Trumbull4969144
Greene489662
Clark486664
Marion451451
Allen446384
Wood4243107
Medina413354
Miami398565
Pickaway387948
Columbiana328496
Portage323171
Wayne303593
Tuscarawas299557
Richland293929
Mercer281237
Ross234559
Hancock225336
Muskingum223610
Auglaize218925
Putnam218649
Darke208058
Erie205565
Ashtabula204753
Geauga189451
Scioto186713
Lawrence181336
Athens17954
Union17928
Shelby176715
Seneca165018
Belmont151529
Madison151018
Sandusky144427
Preble143821
Huron139218
Holmes137039
Defiance131121
Knox118818
Logan118313
Fulton117225
Ottawa114730
Crawford114216
Washington112427
Clinton100314
Williams9938
Jefferson9894
Ashland98322
Highland96317
Henry94422
Brown9324
Champaign8935
Jackson87312
Fayette86617
Van Wert8596
Morrow8312
Hardin82518
Guernsey79213
Coshocton78813
Perry73312
Pike7081
Adams70611
Wyandot68916
Gallia68113
Paulding61710
Hocking58511
Noble56121
Carroll41610
Meigs36312
Monroe29921
Morgan2342
Vinton2075
Harrison1823
Unassigned00
Fort Wayne
Clear
39° wxIcon
Hi: 46° Lo: 29°
Feels Like: 35°
Angola
Overcast
39° wxIcon
Hi: 44° Lo: 26°
Feels Like: 35°
Huntington
Overcast
41° wxIcon
Hi: 44° Lo: 30°
Feels Like: 37°
Decatur
Broken Clouds
41° wxIcon
Hi: 46° Lo: 30°
Feels Like: 37°
Van Wert
Broken Clouds
41° wxIcon
Hi: 46° Lo: 29°
Feels Like: 37°
Snow/Rain Showers Tuesday
WFFT Radar
WFFT Temperatures
WFFT National

Community Events