Egan - Jones cuts Italy to B+ from BB and Here's Silvio.......

http://www.reuters.com/article/2012/06/01/italy-rating-eganjones-idUSL1E8H1KT020120601

(Reuters) - Ratings agency Egan-Jones on Friday downgraded Italy's sovereign rating to B-plus with a negative outlook from BB, noting the country's limping economy and the chance its banks could need more help.

"Italy is in miserable shape," Egan-Jones said in a statement.

"Italy's independent ability to support its banks is questionable given the country's weak condition," the agency added.

The euro zone's third biggest economy has worried global investors as the region's sovereign debt crisis continues to drag on markets around the world.

Recent data have underscored a slowdown throughout the monetary union, with the latest figures showing Italy's factories contracted for the tenth straight month.

Bank of Italy governor Ignazio Visco said on Thursday that political inertia and bad economic decisions had put "the entire European edifice" at risk and only a clear path to political union could save the euro.

"There are now growing doubts among international investors about governments' cohesion in guiding the reform of European governance and even their ability to ensure the survival of the single currency," Visco told the Bank of Italy's annual meeting.

Moody's Investors Service rates Italy an A3, Standard & Poor's rates Italy BBB-plus and Fitch rates the country A-minus. All three of those agencies have a negative outlook on Italy.

and.....

http://www.reuters.com/article/2012/06/01/us-italy-banker-crisis-idUSBRE8501DT20120601

(Reuters) - A top Italian banker said on Friday that the European single currency was "on the edge of the abyss", and indicated that national regulators were helping to cripple interbank lending across the euro zone by urging banks to lend domestically.

"The Greeks will decide on their own whether to stay in the euro or leave it, but if they leave and we haven't decided what to do to keep the others in, everything will fall apart," Alessandro Profumo, chairman of Italy's third-largest lender Banca Monte dei Paschi di Siena (BMPS.MI), told an economic conference in Trento, Italy.

"We are on the edge of the abyss ... The risk that (the single currency) may fall apart rises every day."

Greece is holding a new election in mid-June that could determine whether or not it remains in the euro zone.

Profumo, previously chief executive of UniCredit (CRDI.MI), Italy's biggest bank by assets, said that while European policymakers were taking time to ponder a course of action, rapid decisions were needed.

"If we continue to hold discussions, Italian government bonds won't be renewed and banks will end up totally dependent on European Central Bank liquidity," he said.

Italy has the world's fourth-largest public debt and its large refinancing needs make it vulnerable to a worsening in the euro zone debt crisis.

Calls are growing in Europe for progress towards a single banking system, with some central bankers seeing it as an essential step to overcome the crisis, which has dried up cross-border capital flows, crippling the euro zone's interbank lending market.

Speaking at the same conference on Friday, European Central Bank Executive Board member Benoit Coeure warned against the disintegration of a single market for capital in Europe.

Profumo urged a uniform regulatory environment for banks in Europe.

"Every regulator says not to lend money to a bank in a different country because there is a risk," he said, adding that this meant a single European market for banks no longer existed.

and Silvio advises Italy to say   " Ciao Ciao "  to the euro  and gets ready for some.... Bunga Bunga  .....

"Ciao Ciao" To The Euro?

After a fairly long absence, Silvio Berlusconi is back on our blog. And he hasn't lost his provocative touch. Speaking at a meeting of MPs and Senators from his People of Freedom party, the former Italian Prime Minister had some pretty interesting things to say about the euro, money printing and Germany. Drawing from several Italian media sources, we can offer you some of the best quotes from Berlusconi's speech. Here goes:

"We must tell Europe with strength that the ECB has to start printing money. The ECB has to change its mission."

Good luck with that Silvio, but not the one who's easily deterred he went on:

"Either the ECB becomes the [eurozone's] lender of last resort, or the problem of Europe, or better of Germany in Europe, arises. Germany should leave the euro instead, if it doesn't agree with the ECB acting as the lender of last resort."

So Germany leaving? It's Silvio, but still. He wasn't done, however:

"I'll tell you the crazy idea that I have in mind: let's start printing euros with our national mint [if the ECB refuses to do so]."

"If Europe doesn't pay attention to our demands, we should say 'ciao ciao' and leave the euro."

"Leaving the euro wouldn't be the end of the world. Britain is a solid country and has never joined the euro." 

Il Cavaliere's remarks are literally all over the place, i.e. ECB money printing or the Italian Central Bank should fire up the printing presses with or without Frankfurt's approval. Alternatively, either Germany or Italy itself leaves the euro "which wouldn't be the end of the world." Extraordinary stuff.

All empty rhetoric? Most likely. But if there's one thing Berlusconi knows better than many other Italian and European politicians is how to tell people exactly what they want to hear. And remember, Italy will see key national elections in 2013 in which Berlusconi's party is a contender. It's no coincidence that he is now mentioning the possibility of Italy leaving the euro - an idea floated by Italian comedian Beppe Grillo, the rising star of Italian politics, during the campaign for last month's local elections (from which Grillo's Five Star Movement emerged as the big winner).

And it's a most interesting development that a senior Italian engages in outright anti-euro rhetoric.