Italian spread dips to lowest level since 2011
Spike in borrowing costs caused demise of third Berlusconi govt10 December, 12:01
The spread, a key measure of Italy's borrowing costs and of investor confidence, dropped to 226 basis points after closing trading Tuesday at 228.
It subsequently climbed back up to 228 points with a yield of 4.11%.
Italy risked enduring a Greek-style financial meltdown in 2011, when the rate on the 10-year-bond peaked at over 7%, with the spread between it and the German benchmark above 500 points.
That crisis caused ex-premier Silvio Berlusconi's third government to collapse in November 2011 to make way for ex-premier Mario Monti's emergency technocrat administration. Austerity polices introduced by Monti's executive reassured investors and steered Italy out of the crisis, but they also deepened its longest recession in over two decades.
As a result unemployment has reached record levels of over 12%, with over four in 10 under-25s jobless.
Premier Enrico Letta, whose left-right coalition government replaced Monti's executive in April, said in October that Italy will remain vulnerable to financial turbulence while the interest rate on its 10-year bond is above 3%.