Comments by Italy's European affairs minister, Paolo Savona
- Need to strengthen the two key pillars of the EU - the single market and euro
Savona was initially slated to be the finance/economic minister in the initial government proposal which was rejected by Italian president Sergio Mattarella. He's a euroskeptic by nature, but some conciliatory comments are much expected for now as the new government settles in.
But once the populist government is able to garner a strong position in the country, it's very possible they may shift the euro rhetoric a bit more to the other side of the scale. Either way, Italian investors are not too impressed still - demanding a much higher premium on local bonds as there are still doubts on the new government's fiscal responsibility.
The yields spread between Italy and Germany 10-year bonds is now sitting at 266 bps, moving back towards 5-year highs that we saw in late May.
