Italy's Immediate Problems Have Disappeared
Record-low bond yields are back in sight for Rome on the back of the EU pandemic fund. That bodes well for a more relaxed summer in Europe.
A better summer?
The European Union has successfully circled the wagons with its landmark agreement for 750 billion euros ($859 billion) of grants and loans for those countries requiring pandemic support. That’s excellent news for Italy, which has the biggest sovereign debt in Europe and needed to guarantee its ability to raise finance. In turn, that reinforces the whole euro project by propping up the bloc’s most problematic member.
Any worries that Italy might struggle to fund itself have been dispelled by the recovery fund’s mutually provided arsenal, from which Rome can access 82 billion euros of grants and 129 billion euros of super-cheap loans. The country also expects to secure 25 billion euros of loans from the EU's SURE (emergency unemployment support) program, according to analysts at NatWest Markets.