-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI ASIA MARKETS OPEN: Tsy Curves Reverse Course Ahead Wed CPI
MNI ASIA MARKETS ANALYSIS:Waiting For Next Inflation Shoe Drop
Key Inter-Meeting Fed Speak – Dec 2024
US TREASURY AUCTION CALENDAR: Avg 3Y Sale
MNI: Italy Meets Criteria For ECB's New Crisis Tool - Sources
The European Central Bank’s new Transmission Protection Instrument marks a break with the punitive approach taken in the past by European authorities to countries struggling with debt problems, two Italian government officials told MNI, adding that Italy meets the four criteria to be eligible for assistance under the facility should that be necessary.
In order to qualify for TPI assistance, a country has to be compliant with European Union fiscal frameworks, be free of severe macroeconomic imbalances, and have sustainable public finances and sound economic policies, conditions which the sources indicated were satisfactory to Italy, and which differ from the tougher requirements, including signing up for a European Stability Mechanism Programme, imposed by the ECB’s Outright Monetary Transactions facility.
The TPI, which would be deployed to buoy eurozone member states’ bonds if spreads diverge from economic fundamentals and is likely to be used at some point, completes the toolkit for the ECB, following the creation under its then president and current Italian Prime Minister Mario Draghi in 2012 of the OMT, whose unlimited firepower has proven such a deterrent that it has never had to be used, the sources said.
The new tool is a sign that the European Union has changed its approach towards financially weaker countries since the debt crisis, said the sources, who are close to Italy’s economic policy making.
“Compared to ten years ago, there is a new air in Europe, which appears to be more equipped than in the past to face economic and financial crises,” one source said. “The mistakes of the past cannot be repeated.”
PAST APPROACH "PUNITIVE"
The sources pointed to what one called the “punitive attitude” taken towards Greece as its economy entered crisis, adding that this had “echoed the sad experience of conditional financing by the IMF to developing countries.”
The difference in approach seen with the TPI partly derives from the pandemic’s legacy of significant additional indebtedness even for the healthiest eurozone economies, reducing the differences between member states’ fiscal positions, one of the officials said, adding that the focus of investors is shifting towards the ability of Europe to “act together as a bloc” and away from individual countries.
While aspects of the TPI have yet to be clarified, some of the conditions are based on Stability and Growth Pact rules on government borrowing which were eventually likely to be relaxed, one of the sources noted.
As Italy heads for Sept. 25 elections which polls suggest might result in a government led by the far-right Brothers of Italy, the officials noted that the ECB and EU authorities will not be more demanding of a new government simply because of its ideological orientation but that much of the bloc’s new financial architecture, like the NextGenerationEU pandemic recovery package as well as the TPI rely on mutual trust.
“It is wise to respect the rules that we ourselves have helped to define,” one official said.
Draghi, who is continuing as caretaker until the appointment of a new prime minister, following the implosion of his coalition earlier this month, has been arguing strongly for Italian governments to commit to engaging with European institutions. (See MNI: Draghi To Push Through Court Reform, Start Budget-Aides)
“In that sense, the Draghi agenda has transmitted something to our country,” said one of the officials, adding that several of Italy’s main political parties are now claiming to be the inheritors of his technocratic policies.
Italy’s next government should act “with confidence, seriousness and awareness that Europe is our true insurance for the future,” one of the officials said.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.