ECB can't, and won't, rescue Italy without a full-on bailout agreement - Heisenberg Report

As noted by the Heisenberg Report, on Thursday news outlets reported that the European Central Bank would not be throwing Italy a lifeline as long as the country continues to flaunt Eurozone budgetary guidelines.

Key highlights

The ECB will be unlikely to provide any type of specific financial aide or assistance to Italy in the face of burgeoning bond yields and questionable government budget targets, unless Italy is willing to go to the European Union first seeking a formal bailout.

Italian assets continue to roil in turmoil under threat of an Italian debt crisis, but Italy's nose-thumbing antics at the EU sees the ECB unable and unwilling to help the country should things continue to get worse.

“Italy might be relying on the hope of a new round of government-bond purchases by the European Central Bank to shield its public debt from financial speculation and the threats of a rating downgrade”, Bloomberg wrote at the time, summarizing a La Stampa article and adding that according to one official, “the new QE-styled program could have a different name if needed.” Just to be clear, that means Italy wants to flip the E.U. the bird with one hand by flouting budget rules and ask for a bailout from the ECB with the other hand when the bond market tries to price in irresponsible fiscal policy. As ever, irony is dead. - Heisenberg Report