Italy Hits Sanremo Music Festival Audience With Bond Sales Pitch

John Follain and Alberto Brambilla
·2 min read
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(Bloomberg) -- Giorgia Meloni’s plan to shift the burden of Italy’s debt to her voters reached a new milestone when a pitch for government bond sales ran during the nation’s most iconic song contest.

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The advertisement, which appeared during a public TV broadcast from the annual Sanremo Music Festival on Friday night, promoted an issuance of the BTP Valore bond later this month as offering an “advantageous return exclusively dedicated to small savers.”

As Italy benefits from a rare respite in financial markets just as it prepares to issue the most bonds in its history, Meloni’s right-wing administration is leaning harder than ever on consumers.

Getting ordinary savers to buy debt, along with taking measures to avoid any worsening of public finances, are now key pillars of Rome’s strategy to stay sustainably afloat. Italy’s issuance to retail investors dwarfs that of other European countries. With the new series of such bonds coming late this month, the recent experience suggests demand will stay vigorous.

Success for the new bonds would be another fillip for Meloni, who’s started the year on a strong footing, having avoided a potential downgrade of Italy’s debt to junk in a string of ratings reviews. The yield spread between its bonds and German equivalents, a key measure of euro-area risk, recently touched a two-year low.

Fabio Panetta, governor of the Bank of Italy, said Saturday at the annual Assiom Forex event in Genoa that Italy’s deficit will decrease but that debt is unlikely to shrink.

“The information available for 2023 suggest that the fiscal deficit and public debt as a percentage of GDP have fallen,” he said. “Over the next few years, despite the expected decline in the deficit, debt should remain broadly stable.”

--With assistance from Chiara Albanese.

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