, Columnist
Adults in the Room Mean There's Value in Italy
And there’s plenty of demand for Italian debt.
The ECB still carries a big stick.
Photographer: Alessia Pierdomenico/BloombergThis article is for subscribers only.
Deep breath, but here goes. Italian government bonds might offer some value after widening more than 40 basis points to Germany over the last three weeks. There’s plenty of money sloshing around to lend support.
The Five-Star Movement and the League have produced a coalition agreement that takes another step toward introducing a populist government in the European core. The platform abandons some items that would have been truly frightening for investors, such as debt forgiveness. But what remains is still pretty scary. There’s a lot of fiscal expansion and no practical measures to pay for them. It’s a big bet on a lot of growth.