MILAN (Reuters) - Italy needs a credible strategy to reduce its public debt in order to improve its creditworthiness, an analyst at ratings agency Moody’s said on Friday.
The risk that Italy’s debt could stabilise at its current level - around 132 percent of economic output - is greater than any political risk posed by upcoming elections on March 4, senior ratings analyst Katrin Muehlbronner told reporters during an event in Milan.
“Our decisions will be based on the policies that are actually adopted, we don’t take a view based on the promises of an election campaign,” Muehlbronner said, describing current political risk in Italy as “low”.
Moody’s, which currently rates Italian debt Baa2 with a negative outlook, would decide whether to lift the outlook some time after the vote, but probably not as early as its next scheduled decision on March 16, she said.
Italy’s banking system, long weighed down by nearly one third of the euro zone’s stock of bad loans, is no longer a major factor in assessing systemic risk, he said.
Reporting by Giulio Piovaccari, writing by Isla Binnie