EXECUTIVE-JUDICIARY TENSION AFFECT RATINGS, MOODY'S SAYS
EXECUTIVE-JUDICIARY TENSION AFFECT RATINGS, MOODY'S SAYS
(ANSA) - Milan, November 6 - Tensions between the Italian government and the judiciary affect the ratings international agencies put on Italy's debt, according to an official from Moody's Investors Service.
"Tensions between the executive and the judiciary are a typically Italian phenomenon, it exists nowhere else, and it raises questions and needed to be addressed in assigning ratings," explained Alexander Kockerbeck, Vice President-Senior Credit Officer in Moody's Sovereign Risk Group.
For the investors, Kockerbeck observed, these tensions represent "an element for concern and indicate a certain weakness and uncertainty, as well as a risk that a difficult situation could be created".
The tensions between the government and the judiciary stem primarily from allegations by Premier Silvio Berlusconi that the judiciary is mounting trials against him as a way to remove him from power against, in his view, the will of the voters.
Speaking at a seminar dedicated to current credit risk trends, the Moody's official said that while Italy's accounts were "stable but fragile," the structure of the country's debt was "correct, given that for years Italy has been able to finance interest payments on the debt".
Italy has the third highest public debt in the world after the United States and Japan.
On Tuesday Moody's said it was keeping its rating for Italy at Aa2 and its outlook at 'stable' because it was convinced that the country could adjust to the challenges posed by the global economic downturn.
Looking at Italy's prospects for the future, Kockerbeck recalled that the country "is the world's seventh economic power, fifth leading exporter and has a very broad and diversified economic base".
"What it needs to do now is try and maintain these positions despite a constant decline in market share which has been in progress for years and has created problems of productivity and product fragmentation. All this represents a challenge for the country which, however, can start tackling it at a high level," the Moody's official said.
Turning his attention to Europe, Kockerbeck observed that it was "becoming more Italian" in regard to the amount of cash governments were pumping into the economy and the subsequent deficits and debts they were running up.
