Quotes from a research note today by..........>

ITALY: Quotes from a research note today by Lorenzo Codogno, ex-chief economist

at the Italian Treasury and MNI Connect Board Member:

- The Italian Parliament will have to rush for a Budget approval by Christmas,

inevitably with a confidence vote. Do not hold your breath: the government will

not collapse on this.

- There will be a maxi-amendment to the Budget presented by the government and

parliament will have a take-it-or-leave-it vote under the Christmas tree. It

will take it. The final vote at the Lower House is expected on 18 December, i.e.

the day before the decision in Brussels. 

- `Even if Italy manages to reduce the 2019 deficit to 2.0% (statements by

Salvini and Di Maio suggests that they would not accept anything below 2.0%),

this would reduce the structural expansion from 1.2pp to 0.8pp, still 0.9pp

short of the minimum adjustment.`

- `The bottom line, in my view, is that there is no way to avoid entering [EDP],

without further delaying spending plans`.

- Endgame odds: 70% `muddling through`, 20% `crisis escalation`, 10% `Italexit`.