Attention Turns to Italy’s Debt Woes

Eurozone finance ministers are scheduled to meet in Brussels today to discuss growing concerns over the debt crisis in Greece spreading to other countries. Spain and Portugal have already been identified as possible problem areas and now Italy is garnering more attention.

The spread of Italy’s 10-year government bond yield over the German equivalent hit 2.68%, its highest level since the euro was introduced. As a result, the yield on Italian bonds reached 5.45%, which analysts say is close to levels that could put pressure on Italy’s public finances.

“Italy must itself send an important signal by agreeing on a budget that meets the need for frugality and consolidation,” said German Chancellor Angela Merkel. Merkel also noted that she had “full confidence” that the Italian government would pass an austerity budget to help cut its deficit.

Source: BBC News

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