‘Thieves of freedom’ Salvini’s furious rant as Italy caves to ‘perennial dependence’ on EU

The leader of the far-right party Lega promptly took to Twitter as soon as he heard Italian Prime Minister Giuseppe Conte approved the Brussels’ strategy claiming the plan will steal Italian children of their future and democracy. Matteo Salvini wrote: “The ESM was approved – a dramatic mortgage on Italy’s future and the future of our children.

“Everything else, including the Recovery Fund, will be discussed at a later stage, but a perennial dependence on Berlin and Brussels is already taking shape.

“Defeat, failure, rout, above all preventing our Parliament from voting on it, breaking the law.

“All the Government’s promises not to approve the ESM?

“All the commitments, the attacks, and Conte’s promises?

“They were just fake news.

“Thieves. Thieves of future, of democracy, of freedom.”

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On Thursday, Mr Salvini warned the bloc’s ESM project will cost future generations of European and Italian citizens a huge debt with Berlin and urged Prime Minister Giuseppe Conte to follow the UK’s example.

Italian government bond yields rose on Friday after European Union leaders agreed to build a trillion-euro emergency fund to help recover from the coronavirus pandemic, although they gave no details of the size, speed and structure of the package.

The EU leaders agreed late Thursday in principle to a 1.5 trillion-euro rescue package to share the economic cost of the pandemic, which is falling disproportionately on Southern European states. But a decision on the details of the programme was delayed until Summer.

Short-dated Italian bonds yields jumped 12 basis points. Italy’s 10-year bond yield was up 7 bps at 2.08 percent and the Italian/German 10-year bond yield gap was 14 bps wider from late Thursday, at around 252 bps, erasing Thursday’s narrowing.

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At around 1 percent of the EU’s economic output, the multi-year common budget, the multi-annual financial framework (MFF), has proved contentious for its members.

“Being a seven-year plan, requiring unanimous consent from EU nations, the MFF is unlikely to be the most nimble method to get money to where it needs to be, and therefore it remains highly likely that the most vulnerable parts of the bloc will continue to shoulder the burden for now,” Mizuho analysts wrote in a note.

Despite the agreement, French President Emmanuel Macron said EU governments still disagree over whether the fund should be transferring grant money or simply making loans.

Spanish, Portuguese and Greek bond yields also rose, but to a lesser extent than Italy’s.

Spain’s 10-year government bond yield was last up 4 bps at 1.08 percent, and the spread over German Bund yields was 5 bps wider than late Thursday levels at around 153 bps.


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The benchmark German 10-year government bond yield fell around 4 bps as investors sought safety. It was last at -0.47.

Deutsche Bank analysts said they were encouraged by the reaction from Italian Prime Minister Giuseppe Conte, who has so far refused to request assistance from the euro zone’s bailout fund, the ESM.

“If activating the ESM is politically viable in Italy it could unlock more unlimited sub-3-year buying of BTPs by the ECB,” they said, referring to Italian bonds.

Italy’s bond market faces another test on Friday, with S&P Global set to review the country’s BBB credit rating – just two notches away from junk territory.

While a downgrade appears unlikely, analysts say, the risk looms large in the months ahead, given Italy’s deteriorating debt outlook in the face of the coronavirus crisis.

Fitch late on Thursday revised its outlook on Greece to stable from positive – the latest sign that the ratings outlook for eurozone sovereigns has worsened.

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