Italy debt woes cause Swiss franc to rocket

Financial experts are forecasting that the franc may rocket even more this week, causing a major headache for thousands of Poles who hold mortgages in the Swiss currency.

The worst hit are some 100,000 Polish families which took out the long-term loans three years ago, when the Swiss franc was on average 50 percent cheaper than today’s rates.

After a momentary period of stability in Greece, the Swiss franc rose after worries that Italy, the eurozone’s third largest economy, may be the next country to face bankruptcy.

The Italian parliament this week starts debating substantial public spending cuts to try and balance the country’s budget by 2014, although Italy’s economy minister, Giulio Tremonti is lacking in political allies to push through much-needed reforms.

Prime Minister Silvio Berlusconi also criticised Tremonti last Friday, with ensuing speculation that the economy minister might resign from his post, which in turn led to a dumping of Italian assets.

Today global markets have noted a drop to uncertainties surrounding the Italian crisis, with the Borsa Italiana in Milan dropping over 1 percent so far during Tuesday’s trading.

Meanwhile, EU finance ministers in Brussels have relaxed conditions under which Greece will have to pay back its bailout loans in the hope that the decision will also calm down the situations on financial markets, and in Italy itself. (jb)

Source: IAR/PAP/money.pl