By Francesca Landini
MILAN, April 29 Rating agency Moody's believes
Italy may still eventually need to seek a bailout despite
forming a new government and avoiding immediate crisis.
"We cannot yet rule out Italy will end up asking for help to
the European Central Bank and the European Stability Mechanism,"
Dietmar Hornung, senior credit officer at Moody's, was cited as
saying in Monday's told La Repubblica.
Prime Minister Enrico Letta's new Italian government was
sworn in on Sunday and the premier will seek the backing of
parliament in a confidence vote at 3 p.m. on Monday.
Letta is expected to have the backing of his own centre-left
Democratic Party and former prime minister Silvio Berlusconi's
centre-right People of Freedom party, to break a stalemate that
lasted around two months after February's vote.
Hornung said Moody's will monitor the ability of the newly
formed government to overhaul the economy.
"We will have to verify the commitment of the new government
and its ability to resolutely pursue the huge structural reforms
the country needs to improve its creditworthiness,"
"For now the situation remains difficult," Hornung said.
The ratings agency said on Friday it had kept Italy's
sovereign debt rating at Baa2 thanks to the country's reasonably
low current cost of funding and its primary surplus.
But Moody's maintained its negative outlook for Italian
sovereign debt because of prolonged economic crisis.