We are confident of Italy’s change of government, says Pioneer’s Lombardo
Giordano Lombardo, Group CI at Pioneer Investments, comments on the newly appointed Italian PM, ex-mayor of Florence Matteo Renzi.
We are confident of this change and are aware that the new government will be judged more on facts than on claims. One of the key objectives that the new government will have to address will be on how to deal with the European economic targets (balanced budget principle in the Italian Constitution). How this dialogue will evolve is strictly connected with the outcome of EU parliamentary elections in May.
We welcome the upgrade of Moody’s outlook from negative to stable, as it underscores improving economic conditions. Bond markets may be anticipating a lot of the good news. However, in the face of a still heavy government debt burden, 10-year government bond yields are at 8-year lows and are now close to historical lows.