The spread between Italian and
German 10-year bond yields, a gauge of Italy's borrowing costs
and of market confidence in the Italian economy, widened to 141
points Friday, from 137 at the start of the day, a day after
European Commission President Jean-Claude Juncker said the EC
must prepare for a "non-operational government" in Italy after
the March 4 general election.
The EC chief said this would be "the worst-case scenario".
Juncker said that "a strong market reaction in the second
half of March is possible, we're preparing for this scenario".
Most polls have shown that the election will produce a hung
parliament.
Juncker later rowed back form his comments, saying he would
have the "utmnost confidence" in any post-election government.
The lower the spread is, the better it is for the Italian
economy and debt-servicing costs.
The spread rose above 200 points last year on EU populist
fears.
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