Support the Wall Street Examiner! Choose your level of support to receive a free proprietary report as my thanks. Click the button below to see your options. Become a Patron!

UPDATE 3-Italy at heart of crisis as borrowing costs climb

UPDATE 3-Italy at heart of crisis as borrowing costs climb
Fri Oct 28, 2011 1:43pm EDT

* 10-year borrowing costs hit euro lifetime high

* Markets sceptical about Berlusconi’s ability to deliver

* Premier calls euro “strange currency”

By James Mackenzie and Valentina Za

ROME, Oct 28 (Reuters) – Italy’s borrowing costs jumped to record levels on Friday, underlining its vulnerability at the heart of the euro zone debt crisis and scepticism about whether the struggling government of Prime Minister Silvio Berlusconi can deliver vital reforms.

The 6.06 percent yield paid at an auction of 10-year bonds was the highest since the launch of the euro and not far from the level reached just before the European Central Bank intervened in August to cap Rome’s borrowing costs by buying Italian paper.

Italy, the euro zone’s third largest economy, is once more at the centre of the debt crisis, with fears growing that its borrowing costs could rise to levels that overwhelm the capacity of the bloc to provide support amid chronic political instability in Rome.

Berlusconi in a speech in Rome said the record yield would weigh on the country’s finances, but insisted Italy would meet its target of balancing the budget by 2013.

Berlusconi, tainted by scandal and repeatedly at odds with his coalition allies, has promised European partners a package of measures to spur Italy’s stagnant economy and cut its towering public debt, but he has failed to convince markets made sceptical by his repeated failure to deliver reforms

http://www.reuters.com/article/2011/10/28/italy-berlusconi-idUSL5E7LS3NE20111028

(Italy is incapable of collecting taxes – always has been / always will…..)

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.