In what is likely to be a shock to the system of EU austerity negotiations, Italy will move its balanced budget goal from 2013 to 2014. Reuters reports that a document from the office of Prime Minister Mario Monti shows the altered goal.
The news will rattle the global capital markets, which already are concerned about the financial future of Spain and Italy. Spain’s borrowing costs have soared, and a delay in Italy’s financial plans likely will cause it to suffer a similar fate. Even though regional financial ministers have set total bailout funds at $1 trillion, most experts believe this will be insufficient to ensure large aid packages to both Spain and Italy.
The sovereign debt crisis just got a little worse.