Sometimes, it’s like the mainstream press is trying to misread the signals that’re right there.
In CNBC last week, the headline read
“Italy sends smoke signals to markets that it will play by Europe’s budget rules.”
The sub-head continued:
“Italy’s economy minister is expected to prevent Italy’s 2016 budget deficit from rising above 1.6 percent of the country’s gross domestic product (GDP).
All well and good. Except that if you’ve been following the Italy story, you’ll know that the economy minister Giovanni Tria is a bit of a cuckoo in the nest, installed in his position by the Italian President.
In other words, he doesn’t speak for his party – or, in this situation, his coalition.
How do we know? Because this week, an audio clip was leaked of Rocco Casalino, a spokesman for the Italian prime minister, airing his views on the budget.
It’s fair to say Casalino didn’t mince his words.
“If, in the end, they tell us “ah, we couldn’t find the money’ then we’ll spend all of 2019 getting rid of all these pieces of s*** in the ministry of finance.”
Casalino then warned that “A mega-vendetta is ready” and that “the knives would come out.”
You’d assume that a party intent on playing ball with the EU’s requirements for a ‘restrained’ budget would be distraught about Casalino’s remarks.
Prime Minister Giueseppe Conte and the other major coalition leaders defended Casalino, noting that while the tone of his words weren’t ideal, they made no comment on the content of what he said.
To all intents and purposes, they agreed with him.
Matteo Salvini gave an interview to the Corriere della Sera last weekend in which he stated:
“The 2019 budget must be a courageous, expansive one.”
It’s your decision who you choose to believe.
Giovannia Tria, the finance minister neither side of the coalition wanted…or men like Conte and Salvini, who have made promises to the Italian people and, in the end, run the Italian government.
I know which side of the debate I fall on, and I believe I know what the consequences will be for anyone that has money in the UK stock market.
If you’re happy to take the word of the pro-EU finance minister, then you’ve got nothing to worry about.
Publisher, Southbank Investment Research