Milan

Milan, other European markets climb in Monday's trading

Italian markets buoyed by end to excessive-deficit procedure

Milan, other European markets climb in Monday's trading

Milan, May 23 - Milan's leading financial market was on the rise Monday after reports the European Commission (EC) is set to end the excessive-deficit procedure against Italy. That is expected to free up eight billion euros of public money in Italy, funds which would otherwise have been applied to reducing the debt as a percentage of GDP. As a result, the FTSE-Mib gained 1.55% in Monday's trading, to climb to 17,159 points. A conclusion to the excessive-deficit procedure, which will be felt in next year's budget, is scheduled to be ratified on Wednesday. The EC is set to close the procedure it opened in 2009 as Rome has forecast that Italy's budget-GDP ratio will be under the 3% threshold allowed by the EU this year, at 2.9%. It was 3% last year. A country has to be within the deficit margin for two consecutive years for the procedure to be closed. Meanwhile, the spread between Italy's 10-year bond and its German counterpart closed at 259 basis points, similar to where it ended trading last week. The yield on Italian 10-year paper closed at 4.04%. The spread between lending rates in the two countries is seen as an indication of investor faith in the Italian economy and its ability to cope with a lingering recession. On other European markets, Frankfurt's DAX gained 0.94%, closing at 8,383.30 points, while Paris's CAC 40 rose by 0.97%, ending trading at 3,995.16 points, and Spain's IBEX 35 gained 1.10% to close at 8,355.90 points. London's FTSE 100 was closed for a bank holiday.

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