‘Significant’ spread drop with Draghi govt – ECB

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(ANSA) – ROME, MAR 25 – The spread between Italian and German
10-year bond yields, a mark of market confidence in Italian
creditworthiness, dropped “significantly” after former European
Central Bank (ECB) President Mario Draghi was asked to form
Italy’s national unity government, the ECB said Thursday.
    “The differentials of Italian state bonds significantly dropped
in the period preceding the formation of the new government by
ex-ECB president Mario Draghi and briefly reached a new
multi-year low before starting to rise again,” said the ECB’s
economic bulletin.
    It said the differentials on Italian 10-year bond yields fell by
12 basis points, reaching 0.73%.
    This was compared to rises of 1.1 points, 1 point and 6 point by
German, French and Spanish yields respectively, reaching -0.26%
, +0.01% and 0.41% respectively.
    The bulletin added that the impact of COVID lockdowns in Italy
was “comparable” to that of other European countries.
    Italy suffered a bigger drop in economic activity during the
2020 pandemic shock, it said, but “the direct negative impact of
containment measures was broadly comparable to the eurozone
    While lockdowns had a major impact on sectors like toruism and
hospitality, the ECB said, the hit taken by manufacturing “was
largely due to external factors” such as the contraction in
foreign demand. (ANSA).


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