S & P’s boccia Italy, rating to BBB – A step above the level … – BBC

GROWTH AND REFORMS

Milan , December 5, 2014 – 19:32

     
     
 

Standard & amp; Poor’s cut its rating for Italy to BBB -, an evaluation choc just above the “junk” junk. The reasons for the downgrade are explained with the “strong increase in debt, accompanied by a perennially weak growth and low competitiveness.” The American agency had suspended the trial last June, confirming our country’s rating BBB albeit with negative outlook, to allow the government Renzi, then installed by only two months, to launch reforms. Six months later, the picture is worse, at least according to the S & amp; P’s BBB rating that considers that “no longer compatible.” The worsening economic conditions, it says, is “undermining the sustainability of the public debt.”

Jobs Act, decrees at risk

“We note that the prime minister Renzi has moved forward with the Jobs Act,” but “we do not believe that the measures provided will create jobs in the short term ”, economists have argued S & amp; P’s in the report, stressing that the “decrees” of the reform could “be softened” and what “might happen in the light of a growing opposition”
Sources government agency reported Radiocor would see in the considerations of the S & amp; P’s on labor reform “positive elements and not a rejection of the Jobs Act. The reforms are good but you have to proceed more shipped “

Not only labor costs

The difficulties of the recovery also depends on an environment hostile to ‘enterprise and not only by the cost of labor. “Much of the attention on the competitive Italian – writes the agency – and ‘was given to the importance of a domestic devaluation to restore competitiveness by lowering labor costs.” However, the system suffers “a service sector not reformed; justice slow and expensive; a high tax wedge. ” Under the lens also the cost of energy that remains superior to other countries, “partly reflecting the market dominance of monopolies.”

stable outlook, the ECB rescue

L ” outlook ‘(perspective) is listed as stable and at least this reflects “l’ expectation that the rules will be able to gradually implement budgetary reforms and overall structural and potentially favorable to growth, “and the fact that ‘household budgets will remain strong enough to absorb further increases in public debt.” A foster fill could be the ECB monetary policy that “will continue to support a normalization of inflation in Italy and its European partners”

Public debt to 2.256 billion in 2017

“We estimate that the Italian public debt will be ‘equal to 2256 billion euro by the end of 2017, that is 80 billion euro more (or 4.9% of GDP in 2014) of our estimates in June. ” In percentage terms, the S & amp; P projects the debt to increase from 123.9% in 2014 to 127% of 2015 to 127.4% in 2016 before falling back slightly to 126.8% in 2017.

December 5, 2014 | 19:32

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