ECB: Italy’s Walking on Thin Ice

It’s quite clear (see this article from Reuters ) that Ital is now subject to an informal conditionality from the ECB and the IMF, which is much more than scrutiny. We are not (yet) borrowing from the Fund or the  EFSF, so that, unlike Greece, we are not subject to meeting agreed numerical targets in order to obtain the disbursement of new tranches of a loan. In our case the 15 page letter presented by Berlusconi in Bruxelles will serve the same purpose: the BCE’s purchases of Italian government bonds will be conditional on progress decided against that yardstick. This is why the IMF,  together with the EU, is sending a mission to Rome.