Bloomberg News

Italy to Sell 440 Billion Euros of Debt in 2012, Cannata Says

November 16, 2011

Nov. 16 (Bloomberg) --Italy’s soaring borrowing costs won’t have a lasting impact on the country’s debt even as the Treasury prepares to sell 440 billion euros ($595 billion) of bonds and bills next year, said Maria Cannata, the Treasury’s director of public debt.

“Next year we have to sell 440 billion; it sounds prohibitive but it’s not, even if things have gotten more complicated because investors are frightened by the volatility in markets,” she said at a conference in Milan.

The yield on Italy’s 10-year bond is hovering near the 7 percent threshold that prompted Greece, Ireland and Portugal to seek European Union bailouts. The difference between the 10-year yield and comparable German debt was at 513 basis points today, more than twice the average for the past year.

Italy can’t be compared with Greece and the debt crisis is European, not just Italian, Cannata said.

“AAA-rated countries such as France are showing signs of contagion,” Cannata said, adding that the widening spread between benchmark French bonds and German bunds was “worrying.”

The loss of investor confidence in Europe’s sovereign debt will take a long time to be overcome and much of the spread of the debt crisis beyond Greece was due to the “slow” response of European Union institutions.

--Editors: Andrew Davis, Jerrold Colten

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To contact the reporter on this story: Chiara Vasarri in Rome at cvasarri@bloomberg.net Elisa Martinuzzi at emartinuzzi@bloomberg.net

To contact the editor responsible for this story: NI BON NI EMC NI EUROPE NI CRUNCH NI GBN NI ITALY NI MARKETS NI MSCIDVEUR NI MSCIWORLD NI NEWBON NI EXCLUSIVE


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