Brussels criticizes the moment chosen by Moody’s to degrade Italy

The European Commission welcomes the reforms undertaken by Rome to try to restore the balance of its public finances.

The European Commission has seriously questioned Friday the ” moment ” chosen by the agency Moody’s to degrade the rating of long-term debt of Italy, welcoming the ” determined ” actions of this country to restore its finances-see this here.

” I have no comments on the content of the announcement, but one can legitimately and seriously question its timing,” said Simon O’Connor, spokesman for the European Commissioner for Economic Affairs, Olli Rehn. ” This is not the first time this issue has come up,” he added.

Brussels regularly questions the timing of rating agencies, especially just before European summits or sensitive euro area meetings.

“We consider that Italy’s actions have been both determined and expanded,” O’Connor said. He mentioned the measures of ” fiscal consolidation”, the introduction of a balanced budget rule in the Constitution and the reform of the labor market. For the spokesperson, ” Italy’s reform effort has been impressive and unprecedented “. He stressed that the country should “now fully implement what has been adopted”.

Lower borrowing rate

Moody’s financial rating agency downgraded Italy’s rating from two notches from ” A3 ” to ” Baa2 ” in the night from Thursday to Friday and maintained the negative outlook a few hours before a stock market issue. debt by this country.

This degradation did not ultimately weigh on Italy. Rome borrowed 3.5 billion euros at three years at rates down sharply or 4.65% against 5.30% on June 14 in the last operation of the same type. This show was considered a test. On the other hand, the country’s 10-year borrowing rate soared on Friday to return above 6%.

Moody’s has justified its position because it is worried about the risk of contagion of the crisis to the third economy of the euro area. “Italy is more likely to experience a sudden increase in its financing costs or no longer have access to the financial markets … because of the increasingly fragile confidence of the markets and the risk of contagion emanating from Greece and Spain, “said Moody’s in a statement.

On Tuesday, Italian Prime Minister Mario Monti had for the first time envisaged that Rome would at some point use relief funds in the euro area to cope with soaring borrowing rates.