Moody's says Draghi govt positive for Italy but challenges remain

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FILE PHOTO: Prime Minister designate Draghi and his new government are sworn-in, in Rome

MILAN (Reuters) - A new Italian government led by former central banker Mario Draghi is a positive short-term development for Rome's credit rating, Moody's said on Monday, adding that challenges remained over the longer term.

The credit rating agency said in a report that it expected the new government to effectively use European Union funds with a view to boosting Italy's growth potential.

However, "as the urgency associated with the coronavirus pandemic fades, it is likely to face similar implementation challenges and political opposition to some structural macroeconomic reforms that we have observed with other governments in the past," it said.

Draghi was sworn into office on Saturday at the head of a government of national unity to deal with the coronavirus pandemic and economic slump.

(Reporting by Valentina Za; Editing by Crispian Balmer)