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Italy’s bond rates spike as Monti fills government

Atlanta Business News 8:16 a.m. Tuesday, November 29, 2011

Italy’s bond rates spike as Monti fills government
The Associated Press

ROME — Italy’s borrowing rates skyrocketed in a big auction of bonds Tuesday as Premier Mario Monti put the finishing touches on his new lean government of technocrats that is tasked with getting the country’s enormous debt under control to avoid a catastrophic default.

Though Italy easily raised €7.49 billion ($10 billion), it had to pay more to investors to get them to open their wallets.

The yield on Italy’s 3-year bonds surged to 7.89 percent in Tuesday’s auction, a full 2.96 percentage points higher than last month, while yields on 10-year bonds spiked to 7.56 percent, up 1.5 percentage points from October. Both rates are unsustainable for the long-term, on par with levels that forced other eurozone governments to seek bailouts.

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