Italy: Open primary important for ruling PD - BBH

In view of the analysts at BBH, nNot yet on many radar screens, and yet potentially of great importance, is the open primary for Italy's ruling PD (April 30).  

Key Quotes

“Recall the fact that the primary was set in April spurred a fissure in the coalition that makes up the party and the spinning off of part of the left-wing split off.   It had accused Renzi of taking the party too far to the right.   We have warned that Italy's election next year may be more of a threat to the EU and EMU than this year's Dutch, French and German contests.”

“The outcome of the primary will determine who face the Five-Star Movement (M5S).  The PD and M5S are in a statistic draw at the moment.  Renzi is likely to win the PD primary, but anything but an overwhelming victory bodes poorly.  It will also be important to see if Renzi shifts to the left or tries to peel votes from the M5S.”

“Fitch reduced its credit rating of Italy to BBB before the weekend from BBB+.  There is unlikely to be much material impact.  Fitch's rating had been higher than the other rating agencies that the ECB uses to set terms of loans it makes.  Fitch's rating is now at the same level as Moody's and DBRS.  This is the lowest level of investment grade.  Standard and Poor's is more aggressive and sets it at BBB-.”