IMF denies it is holding talks on €600 billion Italian bailout
THE International Monetary Fund today denied it was holding talks with Italy about a bailout for Italy.
"There are no discussions with the Italian authorities on a programme for IMF financing," said a one-sentence statement released by an IMF spokesperson.
The denial followed a report by the Italian newspaper La Stampa claiming that the fund could financially assist Italy with up to €600 billion in aid.
The money would give Prime Minister Mario Monti a window of 12 to 18 months to implement urgent budget cuts and growth-boosting reforms "by removing the necessity of having to refinance the debt," the report said.
It added that the IMF would guarantee rates of 4-5pc on the loan - far better than the borrowing costs on commercial markets, where the rate on two-year and five-year government bonds has gone above 7pc.
Italy needs to refinance about €400 billion in debt next year. The country's €1.9-trillion public debt and low growth rate have spooked the markets.