Tue, Jul 24, 2018 - Page 10 News List

Italy’s ex-finance minister attacks coalition’s policies

Bloomberg

Former Italian minister of economy and finances Pier Carlo Padoan warned that the new government’s goal is to dismantle policies that helped put the nation’s economy on a path to recovery during his tenure.

Speaking in an interview with newspaper la Repubblica published on Sunday, Padoan said that recent moves punish companies for relocating, impede the fluid functioning of markets and undermine key labor reforms.

Italian Deputy Prime Minister Luigi Di Maio’s assertions that banks “must pay” for their arrogance have a punitive tone toward the economy, Padoan said.

“The risk is the increase in uncertainty, which has as a direct consequence the suspension of investment decisions just when the economy was starting to grow again,” Padoan said in reference to foreign investors’ view of Italy.

The Cabinet, which was sworn in on June 1, has put forward a populist agenda that also includes tax cuts and income support for the poor.

It is led by Di Maio’s Five Star Movement and Italian Deputy Prime Minister Matteo Salvini’s League, with Padoan succeeded by Giovanni Tria.

Speaking to reporters at the G20 meeting in Buenos Aires, Tria on Sunday said that his aim is to “maintain market confidence and avoid instability.”

Padoan expressed concern that Italian bond yields, which have already risen since the March elections that brought the new coalition to power, could go higher.

Italy’s 10-year bond yields rose to 3.2 percent in late May as financial markets were spooked by weeks of political uncertainty over the formation of a populist government. They have since retreated to 2.6 percent while remaining well above the 1.7 percent seen in December last year.

“The markets are waiting again,” Padoan told the newspaper.

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