European Commissioner for Economic and Financial Affairs Pierre Moscovici warned today that “it’s in Italy’s interest to have a credible fiscal policy.” And, Eurozone finance ministers think that “130% is already a lot”, regarding Italy’s debt to GDP ratio.

European Commission expects Italy’s debt to growth to 133.7% of GDP this year, and peak at 135.2% in 2020. That’s already far above EU’s ceiling of 60%. However, Italy’s Deputy Prime Minister Matteo Salvini indicated this week that debt could even reach 140% of GDP if it’s necessary to boost employment.

Italian 10-year yield breaks above 2.8% earlier this week on concern over Italy’s budget. But it’s currently back below 2.7 handle.

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