Euro recovers broadly today on news that the detailed version of Italy’s budget is not as bad as it’s initially reported. 5-Star Movement leader Luigi Di Maio has made himself clear that the coalition government is “not not turning back from the 2.4 percent target” referring top budget deficit in terms of GDP. However, it’s reported the coalition has tweaked to plan to cut percentage down the road.

The final version could be budget deficit at 2.4% of GDP in 2019, then 2.2% in 2020 and 2.0% in 2021. That would be, at least gesturally, better than the reported plan of 2.4% through the next three years. Though, firstly, whether the eurosceptic coalition would do it is in question. And, whether EU would accept it is another question.

Di Maio has indicated that some details on the so-called Economic and Financial Document would be defined on Wednesday morning. So we’d expect volatility in Euro to continue.

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