BlackRock's European bond head says will buy Italy debt on election clarity

LONDON (Reuters) - A top bond investor at BlackRock, the world's biggest asset manager, said on Tuesday that his fund would exit a long-held underweight position on Italian debt if there were signs the country was not headed back to the polls early next year. Italy could hold an election as early as February, a minister in Matteo Renzi's outgoing government said on Tuesday after speaking with the prime minister. "To get back to overweight we would need clarity that there are no new elections in the next six months," Michael Krautzberger, BlackRock's head of European fixed income told Reuters. Krautzberger said he had been underweight Italian government bonds for the last three or four months, but had reduced that slightly ahead of Sunday's constitutional vote. He said he was also underweight French and Dutch debt in the euro zone, both related to uncertain election outcomes in those countries next year. Turning to Thursday's European Central Bank meeting, Krautzberger said markets would be disappointed if the central bank did not extend its asset purchase scheme at its current pace for six months, or at a slightly slower pace for 9-12 months. (Reporting by John Geddie; Editing by Dhara Ranasinghe)