Italy's borrowing costs rocketed upwards today, but the US can now enjoy much lower rates. The yield on 10-year Treasury notes fell to 1.97pc this afternoon, down from 2.08pc late yesterday. Silvio Berlusconi has anointed as his likely successor a 41-year-old Sicilian lawyer, Angelino Alfano, best known for trying, as justice minister, to guarantee the Italian prime minister immunity from prosecution in the courts. As investors fretted over the effects on the eurozone of a prolonged period of political uncertainty in Italy, the interest rate on Italian five-year government bonds shot above 7%. When 10-year bonds have gone beyond this level, other countries have sought a bailout. The move on the debt markets prompted a sharp about-turn on stock markets in Europe, which had opened higher. Alfano, the secretary of Berlusconi's party, the Freedom People, was in "pole position" to be the right's candidate at the elections he wants to see early next year, the departing PM told one of his own television channels on Wednesday. His appointment would signal a "generational change", Berlusconi said. In another interview, given late last night to the daily La Stampa, Berlusconi said: "I shall not be standing again. Indeed, I feel liberated. Now is Alfano's moment. He'll be our candidate for prime minister. He's very clever, better than one might think, and his leadership has been accepted by all." Berlusconi told the president, Giorgio Napolitano, on Tuesday evening he would resign once parliament had approved the economic austerity measures agreed with the European institutions. Interviewed on the state-owned RAI radio network, the prime minister said he would appeal to the opposition not to oppose the measures on their way through parliament. Early estimates suggested they could be approved in 10 to 15 days. But opposition politicians said Berlusconi and his allies might seek to drag out the process.
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, November 9, 2011
Italy's borrowing costs rocketed upwards today, but the US can now enjoy much lower rates. The yield on 10-year Treasury notes fell to 1.97pc this afternoon, down from 2.08pc late yesterday. Silvio Berlusconi has anointed as his likely successor a 41-year-old Sicilian lawyer, Angelino Alfano, best known for trying, as justice minister, to guarantee the Italian prime minister immunity from prosecution in the courts. As investors fretted over the effects on the eurozone of a prolonged period of political uncertainty in Italy, the interest rate on Italian five-year government bonds shot above 7%. When 10-year bonds have gone beyond this level, other countries have sought a bailout. The move on the debt markets prompted a sharp about-turn on stock markets in Europe, which had opened higher. Alfano, the secretary of Berlusconi's party, the Freedom People, was in "pole position" to be the right's candidate at the elections he wants to see early next year, the departing PM told one of his own television channels on Wednesday. His appointment would signal a "generational change", Berlusconi said. In another interview, given late last night to the daily La Stampa, Berlusconi said: "I shall not be standing again. Indeed, I feel liberated. Now is Alfano's moment. He'll be our candidate for prime minister. He's very clever, better than one might think, and his leadership has been accepted by all." Berlusconi told the president, Giorgio Napolitano, on Tuesday evening he would resign once parliament had approved the economic austerity measures agreed with the European institutions. Interviewed on the state-owned RAI radio network, the prime minister said he would appeal to the opposition not to oppose the measures on their way through parliament. Early estimates suggested they could be approved in 10 to 15 days. But opposition politicians said Berlusconi and his allies might seek to drag out the process.
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European Commission officials told Capital.gr that what is happening in Greece related to the formation of a coalition government indicates significant criminal offenses.
“It is against the country’s economy and the EU budget. Therefore the European Commission is not going to wave aside”, said the officials, who preferred to remain anonymous due to the critical circumstances.
Asked to clarify “offenses against the country’s economy and the EU budget”, the officials declined to elaborate.
Capital.gr addressed also diplomatic sources in Berlin and Paris to clarify the content of EU warning.
Diplomats said that significant speculative moves have occurred recently in bond, stock and forex markets.
Thus, it is a matter of course to activate the competent supervisory authorities to investigate the correlation of political events with market moves.
Market jitters only increased the following day after a document was leaked in which the European Commission questioned the country’s capacity to meet a balanced budget by 2013.
The yield on Italian bonds shot through the roof on Wednesday, beyond the point at which Greece, Portugal and Ireland had been forced to seek financial aid.
The Standard & Poor’s Index 500 lost 3.7 percent, its worst drop in more than two months. Asian markets are almost five percent in the red.
“There is no doubt that the president of the council, the honourable Silvio Berlusconi, will step down after the approval of the stability law,” Napolitano said in a statement on Wednesday.
The law, which includes the austerity measures demanded by European leaders, he said would be approved “within days”. It is set to pass the Senate on Friday and the lower house at the weekend. A new government could be in place as soon as Monday.
Monti is an economist at Bocconi University in Milan, a Yale University graduate, and former two-time EU commissioner from 1995 to 2004 – responsible for the internal market and competition dossiers over his pair of terms in the EU executive.
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