Budget outline leaked.
What happens when you elect a far-left government in coalition with an anti-immigration party?
Somehow the result is the same: The banks always win.
I don't remember League of 5Star campaigning on helping out the banks, but here we are. Reuters report that a draft budget includes extending a state guarantee scheme for 'unlikely to pay' loans.
Here's ING today on the Italian budget:
"While all eyes for the EUR were thought to be on the Italian government's initial budget proposal today, reports this morning note that this may well be delayed and that both the ruling parties (5-Star and League) are now pushing for a 2.4% budget deficit (versus the 2.0% line in the sand). As our Rates Team note when it comes to the budget, the verdict of the rating agencies may be the key driver of BTP spreads over the coming months. Here Moody's, which has placed Italy's Baa2 rating on credit watch negative, will prove clarity by the end of October - while S&P, which has Italy at BBB/Stable, has a review scheduled for October 26. Nonetheless, any delay in the initial Economic and Financial Document release today would highlight the fractions within the Italian government over agreeing on a fiscal 'philosophy' - while it may even risk Italy missing the 15 Oct deadline for submitting a draft budget to the European Commission. There's also noise that FinMin Tria could resign over this. It's no surprise that EUR crosses have headed south on this news; should we see any budget delay, expect EUR/USD, EUR/JPY and EUR/CHF to all move sharply lower. EUR/USD could move to 1.16"
