Italy paid dearly Friday the stalemate of the crisis in the eurozone borrowing rates that have soared to record levels in a debt issue, following a mini-summit between Berlin, Paris and Rome, which has disappointed the markets.
Italian bond yields to six months jumped to 6.504% against 3.535% in a similar operation on October 26 while rates at two years have soared to 7.814% against 4.628%, unheard of since the creation of the euro area. These levels are considered unsustainable over time to the peninsula awash in a huge debt representing approximately 120% of its GDP.
The Treasury, however, managed to raise as planned EUR 10 billion with a demand remains strong make quick cash.
At the head of the country for less than two weeks, Mario Monti said on Thursday during a mini-summit in Strasbourg to the French President Nicolas Sarkozy and German Chancellor Angela Merkel, that Italy would "do its homework "and take the objective of a balanced budget in 2013. A goal that will require the rapid adoption of new austerity measures.
Tackle pension reform
The draconian austerity plans adopted in July and September will indeed not sufficient when the latest statistics (consumption, industrial production) fuel fears of a recession into the third largest economy in the euro area.
- Merkel faces a sharp political debate in Germany
- The Greeks in the street, an emergency meeting of EU
- The 27 reinforce the defense of the euro
- "The Italians can say thank you to the rating agencies'
- The euro zone no longer excludes a "partial failure" of Greece
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