fxstreet.com 05 Feb, 2021 09:45 am

Draghi to have little chances for implementing substantial reforms – CE

Draghi to have little chances for implementing substantial reforms – CE
The markets have reacted well to the news that Mario Draghi has been tasked with forming a new government. It is hard to think of a better candidate t

But this doesn’t necessarily mean that bond yields would be much lower under Mr Draghi than any other prime minister, because the main driver of yields and spreads is now the ECB.Whether or not he succeeds in forming a government, we expect the Bank to drive yields and spreads down this year in order to loosen financial conditions and give the economy a boost.Key quotes “Given that there is not a lot more the ECB can do to loosen financial conditions, and that Italy has implemented a lot less fiscal stimulus than advanced economies outside the eurozone, Mr Draghi may want to increase the government’s fiscal support.FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements.

It also does not guarantee that this information is of a timely nature.It is hard to think of a better candidate to lead Italy through a crisis, but economists at Capital Economics doubt that he would have as transformative an impact on the Italian economy as he had on the European Central Bank (ECB).

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