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Italy and Spain borrowing rates fall

THE COST of borrowing for Italy and Spain fell in a bond auction today in a sign of improved confidence in the market.

Italian 12-month bonds fell to 2.735pc compared with 5.952pc in a similar auction in December and it raised €12bn while Spain raised nearly €10bn although longer-term concerns remain.

New Italian Prime Minister Mario Monti has called on Europe to do more to foster growth in the region.

"Europe is not only about budget discipline,” he told the Italian parliament.

“IIt is very important to move beyond this and to invest constructive political energy in growth," he said.

"We have to exploit the full potential of an integrated continent to grow more. And this has not been done up until now. It has not been done by the European institutions or by the biggest member states," he said.