Italy Opts Not To Release Preliminary GDP Data As It Sets Off To Raise $600 Billion In Debt In 2012

We are trying to decide what is funnier: Italy cancelling bond auctions and telling the world it does not need the cash, even as its Treasury Director tells the world the country will need to raise €440 billion... that's €440,000,000,000 in cash, next year, or that as Reuters reported earlier, the country has simply decided not to issue preliminary Q3 GDP data.

From Reuters:

Italy will not issue preliminary data for third quarter gross domestic product, so the performance of the economy for the period will only be known when final GDP data is issued on December 21, national statistics institute ISTAT said.

 

ISTAT normally issues a preliminary estimate for growth more than a month before the final numbers.

 

The institute said a series of revisions were being drawn up to previous data and this procedure had prevented the calculation of its customary preliminary estimate for the third quarter.

 

The euro zone's third largest economy is widely expected to have contracted between July and September and a further decline in GDP is expected for the fourth quarter. That would provide further fuel for a bond market sell-off that is already driving Italy to the verge of having to seek international aid.

It makes sense: due to austerity Greece had to clamp down on ink costs and as a result was unable to print tax forms. And now Italy gets two ministers for the price of one (PM and FinMin) and now its statistic office is cutting back on calculator and abacus costs. Very prudent and we are sure the ECB will be delighted with this proactive expense management.

Yet one thing is certain: the delay has nothing to do with this:

Italy’s soaring borrowing costs won’t have a lasting impact on the country’s debt even as the Treasury prepares to sell 440 billion euros ($595 billion) of bonds and bills next year, said Maria Cannata, the Treasury’s director of public debt.

 

“Next year we have to sell 440 billion; it sounds prohibitive but it’s not, even if things have gotten more complicated because investors are frightened by the volatility in markets,” she said at a conference in Milan.

 

The yield on Italy’s 10-year bond is hovering near the 7 percent threshold that prompted Greece, Ireland and Portugal to seek European Union bailouts. The difference between the 10-year yield and comparable German debt was at 513 basis points today, more than twice the average for the past year.

 

Italy can’t be compared with Greece and the debt crisis is European, not just Italian, Cannata said.

Yep. Italy is not Greece. It is only about 6 times bigger.