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Edition 27 March 2018 - Crédit Agricole S.A.
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  • Edition 27 March 2018

    Italy – Political risk contained by growth and improvement in the banking sector

    The new government has scant leeway for its first main task, the 2019 budget, owing to the multi-year fiscal trajectory negotiated with the European Commission that is ill-compatible with electoral promises. It is in this area, as well as in the continuation of the structural reforms introduced by the outgoing government, that the reliability of the new coalition will be judged by European partners, rating agencies and investors.

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  • Contents:

    - Resilient macroeconomic cycle
    - Politics: from risk to reality
    - With sovereign risk still uncertain, banks are tending to fundamentals
    - Quarterly economic overview

  • Extract – Politics: from risk to reality

    It is not so much the future coalition that will have an impact on the rating as its programme. Particularly important in this respect will be the commitment to maintaining a prudent fiscal approach consistent with European rules and not to reverse  structural reforms, notably on pensions. In the immediate future, the Gentiloni government, in place until the election of the presidents of the two houses, is set to draw up the multi-year framework for public finances, which will be based on the trend in fiscal balances. The new government will then have to adjust the framework in line with its budget programme in September. For now, the Gentiloni government needs to address the Commission's requirement to reduce the deficit by roughly 0.2 points of GDP so as to comply with the pace of the structural deficit decrease imposed by the 2017 Stability and Growth Pact (SGP).

  • Italy: Composition of the Lower House

    Elections on 4 March 2018: no party not coalition gained a majority. Moderate parties were in the minority. Of the three coalitions possible, the most likely is that of the centre-right with the Democratic Party.

    Italy: Composition of the Lower House
  • Associative topics : Banking and Insurance | Economics | Italy

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