Italian budget negotiations hit by last-minute dispute

Italy’s government is due to decide on targets for the 2019 budget deficit, debt level and growth by midnight Thursday, but negotiations have been hit by a last-minute demand for extra spending by the coalition’s two deputy prime ministers.

League leader Matteo Salvini has decided to support a push by Luigi Di Maio of the Five Star Movement for a budget deficit of 2.4 percent next year, according to a party official. Finance Minister Giovanni Tria is fighting to keep the shortfall to 2 percent.

Italian bonds and stocks declined and the euro weakened as the frictions among political leaders reawakened investor concern. The spread between Italy and Germany’s 10-year bonds widened as much as 16 basis points to 250.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell