‘Follow UK!’ Matteo Salvini rages at EU as he urges Italy not to trust Berlin and Beijing | World | News

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Mr Salvini claimed 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.

He blasted: “That’s what Japan is doing, the US is doing the same, Great Britain is doing the same and Switzerland is doing that too.

“Why do we have to get into debt for life?

“I don’t want my children to get into debt with Beijing or Berlin. I don’t trust either Beijing nor Berlin.”

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It comes as Italian Government debt yields fell on Thursday on hopes that European Union leaders were prepared to agree to joint financing of a recovery from the coronavirus pandemic.

Italy’s yields and the risk premium it pays on its debt had risen on Wednesday amid uncertainty over how the already heavily indebted country will pay for its stimulus plans.

But EU leaders on Thursday afternoon will ask the European Commission to propose a fund big enough for the job, which targets the most affected sectors and regions, including Italy.

Italian yields also fell because the European Central Bank said on Wednesday it would let banks post collateral that was downgraded to junk during the coronavirus outbreak, to prevent a credit squeeze in the eurozone.

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Italian two-year government bond yields were down 9 basis points at 0.967 percent, having fallen earlier as much as 12 bps to 0.94 percent, the lowest since Monday. A day earlier, they rose as high as 1.257 percent. Ten-year yields also fell by the same amount to 2.015 percent.

With the eurozone economy reeling, Italy is in danger of losing its investment-grade credit rating. That would have kept banks from using those assets to finance themselves at the ECB, raising their borrowing costs.

EU leaders are likely to give the EU executive arm until around the end of April to decide the size of the recovery fund and how to finance it. The sums floated before the summit are huge, ranging from 1 trillion to several trillion euros. How to raise the funds and whether they should be loans or grants are contentious issues.

The prolonged negotiations over the economic package was “classic Europe”, said Iain Stealey, international CIO for fixed income at J.P. Morgan Asset Management.

It was not issuing any bonds on Thursday, but was expected to do so on Friday, Mr Cossor said.

Elsewhere, Italy’s economy minister said on Thursday he expected a “strong rebound” in output in the third quarter of the year and significant growth in 2021, after contraction caused by measures to fight the coronavirus.

Yields in core eurozone markets were down slightly too, though German 10-year Bund yields were flat at -0.417percent.

Germany’s coalition parties on Thursday agreed to further measures worth some 10 billion euros to protect workers and companies. Germany has already approved an initial package worth more than 750 billion euros, with the government taking on new debt for the first time since 2013.



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