LYON, France (MNI) – Italy’s progress on structural reforms and the
latest accords to stabilize the Eurozone are having a positive impact on
sovereign borrowing costs, Prime Minister Mario Monti said Monday.
“Everything seems to be calming down” on financial markets, Monti
said at a press conference here with French President Francois Hollande.
Monti said he believed that the accord on further aid for Greece
had helped to lower Italy’s interest rates spreads versus German Bunds,
but also highlighted the “general recognition” that the reforms
undertaken by his government were “going in the right direction.”
“Clearly, we are still at a level of spreads that is not yet
acceptable,” he added, acknowledging investors’ concerns about Italy’s
high public debt.
Italy’s spread to the Bund is down 10 basis points on the day at
297 bps. Monti said the next “very significant” level would be 287 bps,
which would be exactly half the spread when he took over the reins of
government.
Hollande underscored that all member states were benefitting from
the “return to order” in the Eurozone, noting that French sovereign
10-year rates have stabilized at slightly over 2%.
This not only helps governments, but also those firms which have
access to bond market financing, Hollande said. What counts is that the
trend in rates covers all financial relations, he said. Since this is
also a matter of liquidity, it is important that international capital
“return to the Eurozone”.
–Paris newsroom +331 4271 5540; email: ssandelius@mni-news.com
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