Investors fail to buy into Italian economic optimism

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A recent statement from European Central Bank member Christian Noyer suggesting that Italy’s economy was fundamentally sound has been met with scepticism by investors.

Investors also appear to lack faith that new Prime Minister Mario Monti has what it takes to reverse the declining economy and stop the country becoming the latest high profile victim of the Euro-zone crisis.

The crisis deepened further last month as Italy’s credit rating was downgraded by Moody’s from Aa2 to A2.

The global ratings agency blamed the downgrade on a “material increase” in long-term funding risks for the Euro area.

It is certainly another devastating blow for the Euro-zone, with the credibility of economies in Greece, Ireland and Portugal already taking serious damage this year already.

The news is likely to have far reaching consequences, with Asian markets being adversely affected by the news within hours of it breaking.

Leading financial analysts feel this may not be the last downgrade that Italy experience either, putting extreme pressure on their already tenuous ability to borrow funds.

However, it is the repercussions the move could have within the Euro-zone which is most worrying.

The region has suffered serious damage to their global reputation lately with the problems that countries such as Ireland and Greece have experienced.

The last thing they will have wished for was more bad news on the financial front. The move is likely to heap further pressure on France and Germany as the stable players in a Euro-zone which is weakening by the day.

New Premier Mario Monti certainly has his work cut out if he is to use his economics background to restore the country’s diminishing reputation.

Transfer Money to Italy

If you are looking to invest in Italy, think carefully about how you will be transferring money to Italy. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money abroad online, to Italy for example, be sure to compare the market before you buy your overseas currency.

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