ARmy Rumour SErvice

Well I don't feel that the effort of trawling through raw data is worth it in light of your credibility, so lets just say that either you are wrong or this bit of journo totty is wrong...

The problem with Italy's debt is its size - Telegraph

"- Debt repayments: Italy has €173.3bn in short term and long term debt maturing for the rest of this year. Between 2011 and 2014 Italy has €656.4bn maturing."

Originally Posted by Flight

Well I don't feel that the effort of trawling through raw data is worth it in light of your credibility, so lets just say that either you are wrong or this bit of journo totty is wrong...

The problem with Italy's debt is its size - Telegraph

"- Debt repayments: Italy has €173.3bn in short term and long term debt maturing for the rest of this year. Between 2011 and 2014 Italy has €656.4bn maturing."

The Telegraph.....source of all accurate Eurozone data........you need some better sources, and I would expect something in the region of 800-900bn between 2012-2014

Just to add what is known today.
Tomorrow is a 5 billion BOT (Buoni Ordinari del Tesoro) auction - which is a zero coupon bond auction, which means they are sold at a discount and there is no interest payment.
The 14th Nov is a BTP auction (Buoni del Tesoro Poliennali) size not yet announced - which is a treasury bond that pays interest.
Other scheduled auctions this year have been notified as not likely to occur as the treasury has sufficient reserves, but there will be other things going on I expect.
Next maturity is 1st Feb 2012 which I think is for a 10 year BTP.

Originally Posted by Alsacien

Only one is needed and there are a couple of good ones in the frame. What is more important is that everyone climbs on board, which I think has not got to the pressure point yet - they really do not have any issues they cannot cope with in the next 3 months.

So was this master plan dreamed up by Baldric? "I've got a plan so cunning, you can stick a tail on it and call it a dead duck..."

If it was so easy to turn the economy around, don't you think Berlusconi would have done it so he could stay in power and have more bunga bunga parties?

Italy has deep seated structural problems. These include:

- An economy that has become steadily less competitive against the northern European economies: I have seen figures suggesting Italy is 40% less competitive against Germany than when they joined the Euro
- Problems with corruption; the black economy is thought to be about 25% of GDP
- Problems with tax evasion; although not on Greek scales, tax evasion is known to be rife.
- A bloated public sector (that is also used for political patronage)
- Interest payments on a debt of 120% of GDP that have substantially increased.

In addition to the above:

- The EU seems to be tipping back into recession which will worsen the Italian deficit.
- The impending Greek default will further reduce confidence in Italian banks
- The increasingly strident attempts by France/Germany to impose change on Italy may be met with a raspberry.

The time for Italy to start sorting out these problems was several years ago. Instead, no politicians wanted to take the hard decisions necessary. Why should they suddenly grow a backbone and start taking them now? It takes time to turn an economy around. In the case of the UK, it is scheduled to take 5 years to eliminate the bulk of the structural deficit that we have. It is difficult to see Italy addressing its problems on a shorter time scale.

If interest rates on Italian sovereign debt stay above 7% for any length of time, they will need a bail out. The Euro zone politicians totally failed to prevent this crisis - why on earth will they suddenly develop the wisdom and political courage to solve it?

Wordsmith

Originally Posted by Wordsmith

So was this master plan dreamed up by Baldric? "I've got a plan so cunning, you can stick a tail on it and call it a dead duck..."

If it was so easy to turn the economy around, don't you think Berlusconi would have done it so he could stay in power and have more bunga bunga parties?

Italy has deep seated structural problems. These include:

- An economy that has become steadily less competitive against the northern European economies: I have seen figures suggesting Italy is 40% less competitive against Germany than when they joined the Euro
- Problems with corruption; the black economy is thought to be about 25% of GDP
- Problems with tax evasion; although not on Greek scales, tax evasion is known to be rife.
- A bloated public sector (that is also used for political patronage)
- Interest payments on a debt of 120% of GDP that have substantially increased.

In addition to the above:

- The EU seems to be tipping back into recession which will worsen the Italian deficit.
- The impending Greek default will further reduce confidence in Italian banks
- The increasingly strident attempts by France/Germany to impose change on Italy may be met with a raspberry.

The time for Italy to start sorting out these problems was several years ago. Instead, no politicians wanted to take the hard decisions necessary. Why should they suddenly grow a backbone and start taking them now? It takes time to turn an economy around. In the case of the UK, it is scheduled to take 5 years to eliminate the bulk of the structural deficit that we have. It is difficult to see Italy addressing its problems on a shorter time scale.

If interest rates on Italian sovereign debt stay above 7% for any length of time, they will need a bail out. The Euro zone politicians totally failed to prevent this crisis - why on earth will they suddenly develop the wisdom and political courage to solve it?

Wordsmith

Yet somehow it manages to remain in the G7......almost uncanny....

....and still the ECB is not sufficiently concerned to start printing cash, no QE happening there yet....
...and still the Eurozone base rate is not dragging along the ground, plenty of wiggle room there yet..
....and still the Eurozone adjusted inflation rate is looking OK.....

Perspective gentlemen, a lot more smoke than there is fire.

Originally Posted by Alsacien

Treasuries announce bond issues when they feel like, cancel them if they feel like, and adjust the size and maturity as they feel like. Pricing is not something they will know precisely until the day of the sale.
It is not normally quite so changeable, and there is a calendar as they do want to let investors know what is coming so they can plan portfolios, but at the moment...........

Must be fun in your world.

Originally Posted by Alsacien

I think they have averaged a government a year since WW2, so I doubt they will be too upset if Silvio packs has bags and takes his cronies with him. Without his media propaganda machine I wonder how popular he actually his, I've yet to meet an Italian professional who sees him as anything more than an embarrassment.

A cross party government which a technically competent and ego free leader is what is needed, there are (I am told) many seriously good politicians in the Italian parliament, but only half a dozen agree on any one thing at one time. This is hopefully the cattle prod up the arse they needed.

I thought the Silvio actually owned the media? So a government with no leader made up of people you admit can't agree on anything is going to fix the problem?

Silvio should have never gotten back into power after loosing the first time but thanks to basic incompetence of Italian left he did.

If anything it's fairly clear the Italian Spanish and Greek governments are deliberately taking a dive in order to be out of power when the austerity programs really kick in.