Cost of borrowing for Italy reaches new highs
Published 03/11/2011 | 12:00
THE COST of borrowing for Italy hit new highs today after the government didn’t go far enough in new reforms.
The yield on 10-year government bonds hit a peak of 6.402pc this morning – higher than the level last August which forced the European Central Bank to intervene and prop up the market.
It is getting closer to levels that could cause problems for Italy borrowing in the open market.
The Silvio Berlusconi-led government is under increasing pressure and last night introduced new reforms including the unblocking of billions in aid for the south of the country which is being propped up by the richer north.
In addition, the Bank of Italy was forced to announce the results of a stress test which it claimed showed that Italy could reduce its huge debt pile even if the bond rate went above 8pc.