Moody’s debt warn­ing hits Ital­ian stock mar­ket

Kathimerini English - - Focus -

MI­LAN (AFP) – Italy wob­bled on fi­nan­cial mar­kets yes­ter­day af­ter debt warn­ings from rat­ing agency Moody’s and Eurogroup chief Jean-Claude Juncker, while the Ital­ian gov­ern­ment reels from two sting­ing poll de­feats. The main in­dex on the Mi­lan Stock Ex­change plunged by more than 2 per­cent dur­ing mid­day trad­ing, with in­vestor wor­ries hit­ting bank stocks in­clud­ing Banca Monte Paschi di Siena, Banca Popo­lare di Mi­lano and Uni­Credit in par­tic­u­lar. The pres­sure has forced the gov­ern­ment to speed up prepa­ra­tions for a 40-bil­lion-euro (57-bil­lion-dol­lar) aus­ter­ity plan in­tended to bring its pub­lic deficit to just 0.2 per­cent of gross do­mes­tic prod­uct by 2014. “The con­text could not be more dif­fi­cult,” said Marco Valli, an econ­o­mist at Uni­Credit, Italy’s largest bank. He said in­vestors needed “cred­i­ble ob­jec­tives” from Econ­omy Min­is­ter Gi­ulio Tre­monti as Italy’s econ­omy strug­gles. There was more bad news on the econ­omy yes­ter­day as of­fi­cial data showed in­dus­trial or­ders plunged by 6.4 per­cent in April from March. Or­ders had gone up 8.0 per­cent in March but were dragged down by a sharp drop in for­eign or­ders and a fall for the elec­tron­ics sec­tor. The Ital­ian econ­omy grew by just 0.1 per­cent in the first three months of the year and the coun­try has av­er­aged very low growth for the past decade. Juncker, leader of the eu­ro­zone fi­nance min­is­ters, warned on Satur­day that the euro cri­sis hit­ting Greece and oth­ers

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