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“Risky budget, Italy downgraded”, headlines La Stampa. On July 9, Standard & Poor’s agency cut the country’s debt rating from BBB+ to BBB on the grounds that “the country’s budget goals for 2013 are at risk because of differences over tax cuts within the ruling coalition,” explains the Turin daily.
The news sent bond yields rising, and Prime Minister Enrico Letta warned that Italy was still “under special surveillance”. However, according to the daily, the decision “should not do us much harm, because rating agencies are still discredited by their recent self-interested blunders”.
In La Repubblica, though, Federico Fubini warns international trust in Letta has already expired:
Analysts suspended their judgment waiting to know if the new government would address the country’s problems, but now rating agencies, the IMF and even the European Commission are sending Italy the same message: it needs not to dope consumption, but strengthen its muscles. [...] Data show that Italy accumulated the biggest productivity gap in the eurozone and has the highest labour costs relative to the value it produces.
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