By Carl Delfeld of Chartwell ETF and ETFfolio
The new center-right government of Italy is taking action on the fronts of inflation, spending and crime. Chartwell today added the iShares MSCI Italy exchange-traded fund (EWI) to its Country Rotation ETFfolio based on valuations and the pace of market economic reforms.
The Italian government is concerned that spiraling food prices and a six–year high in its core inflation rate will choke consumer confidence. The government plans to include measures in its budget plan for next year to curb the rising cost of basic food products, Prime Minister Silvio Berlusconi said at a news conference in Rome yesterday.
Italy’s parliament last week approved the centre-right government’s plans to make substantial cuts in public spending over the next three years to meet European Union requirements to balance the budget by 2011.
The measures, involving close to $18bn in cuts, reflect a significant shift in the policies of Silvio Berlusconi, the prime minister, and Giulio Tremonti, the finance minister, whose previous administration, from 2001-06, was characterized by rising spending.
Another key issue in Italy is rising urban crime and recently Italian troops, some in body armour and with automatic weapons, were deployed on urban crime patrols, fulfilling an election campaign promise by Silvio Berlusconi to make Italy’s cities safer.
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