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Euro Plummets Near Seven Week Low On Italy Budget Distress

Euro Plummets Near Seven Week Low On Italy Budget Distress

Chapter antimos Italian party Liga and the Deputy Prime Minister Matteo Salvini held a press conference in Rome with the leader of the French far-right marine Le Pen. Italian bonds and stocks tumbled.

"We are against the enemies of Europe - Jean-Claude Juncker and Pierre Moscovici - shut away in the Brussels bunker".

Sterling fell 0.7 per cent to US$1.3034, wiping out all of its gains last week, as markets focused on any substantial breakthrough in Brexit negotiations as Britain moves nearer to an exit deal with the European Union.

With the Commission in Brussels taking action against Poland over its Supreme Court reforms and a recent legal challenge against the Hungarian government; populist governments and the EU's institutions are locked in an increasingly bitter dispute. "It is the emergence of a Europe of nations", she continued.

"With the Italian bond and stock market making its own negative judgement on the Italian desire not to have to embrace Teutonic hair-shirt fiscal policy in a febrile socio-economic environment, Salvini added "If one had evil thoughts, he would think there are people betting on the spread [of Italian over German government bond yields] because they don't want Italy to grow and create jobs".

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Le Pen was supported by Salvini, saying that the European Union is built with a lot of promises, but very few of them actually implemented.

Mr Salvini, leader of the nationalist League party, attacked the European Commission and its senior figures and pledged to use next year's European elections fight back with a populist "front of freedom".

Salvini recently locked horns with Junker and Moscovici over Italy's 2019 budget deficit plans which exceed the limits set by the EU.

"What we see is worrying", Klaus Regling, the head of the European Stability Mechanism, said in an interview with Bloomberg Television.

The Rome-based parliament will start debating the government's budget outline on Tuesday morning with Finance Minister Giovanni Tria holding the first of a series of hearings by the country's main institutions before the Lower House and Senate joint budget committees. The national parliament has to approve the budget law by year-end.