Italy has paid the price for its latest political crisis as its borrowing costs rose to their highest in four months.
The test came on Wednesday at the first government bond auction since an election that raises the prospect of prolonged political instability.
The treasury was able to sell the four billion euros worth of bonds maturing in 10-years time that it wanted but the amount of interest investors demanded to buy them jumped to 4.83 percent – a level not seen since last October.
Italy also issued 2.5 billion euros of a five-year bond on Wednesday, paying a yield of 3.59 percent, up from 2.94 percent one month ago.
There were signs most of the buyers were Italian as foreign investors had stayed away.
Financial analyst Antonio Landolfi said: “Actually, what the international markets want is a degree of governance, even if only in the short term, to be able to respond to the remaining negative trends that seem to be hanging over the markets.”
The fact that the bond auction went smoothly meant investors were relieved, so there was no repeat of Tuesday’s dramatic stock market falls.
But the possibility of new elections, which would prolong the political uncertainty, undermined Italy’s reputation even further with the credit rating agencies which warn Rome faces more downgrades in the future.
Aware of a bumpy road ahead, the Italian treasury had taken advantage of a benign market environment at the beginning of this year to cover more than 20 percent of its total 2013 refunding needs.
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2International news | euronews, latest international news
- 3Partnering to grow Europe
- 4Madrid to appeal Catalan road to independence from Spain
- 5Hope vs harsh reality: challenges to global education goals in the 21st century
- 6Thousands in Bucharest blame corruption for Friday’s nightclub blaze
- 7Moldova: protesters storm Parliament
- 8Extras : euronews : the latest international news as video on demand
- 9Norway sends Syrian refugees back to Russia
- 10‘National’ funeral for Celine Dion’s husband ‘over the top’
- 11Merroussis clinches the 33rd Athens Authentic Marathon
- 12International breaking news | euronews online world breaking news in video
- 13Jorge Lorenzo clinches his third MotoGP title in Valencia
- 14Benzema questioned in French sex tape case
- 15latest Learning World - All Programmes | euronews : the latest international news as video on demand
- 16Special Reports : euronews : the latest international news as video on demand
- 17world Weather | euronews: world ten day weather forecast
- 18French language revolution in France
- 192015 | archives : euronews
- 20Paris: “I would rather see my brother in prison than in a cemetery”
latest economy news
Japan’s yen for zen in the financial markets
Eurozone GDP growth still weak, Greece in recession again
Kremlin ‘considering stimulus plan for Russian economy’
French and German finance chiefs discuss economic weakness and eurozone recovery
To Russia with cash: Chinese tourists offset fall in Western visitors
Wires > Business
- 18:28 CET Hinkley Point decision not on EDF board agenda Monday – source
- 18:03 CET Modi urged to make reality match ‘Make in India’ hype
- 17:14 CET OPEC members increasingly keen to end oil glut – Nigeria oil…
- 16:59 CET Noble Group’s LNG traders leaving to join Glencore – sources
- 15:28 CET BP extends scope of Khazzan gas field development in Oman
- 15:11 CET Carrefour offices searched in French agriculture pricing…
- 15:05 CET Analysis – Fed’s ‘dot plot’ looks increasingly out of touch on…
- 14:23 CET Orange, SFR, Free deal on Bouygues imminent – newspaper