Italian Prime Minister Mario Monti, facing a surge in spreads on his country’s 10-year bonds, said anti-austerity demonstrations in Spain are adding to investor concerns about European debt.
The difference between the yield on 10-year Italian debt and similar maturity German bunds rose 19 basis points to 497 basis points at 2:46 p.m. in Rome. Italian spreads haven’t ended a trading day above that level since Jan. 11.
“It’s difficult to say to what extent the contagion comes or came from Greece or from Portugal or from Ireland or from the situation of the Spanish banks or of the one apparently emerging from the streets and the squares of Madrid,” Monti told reporters in Rome. “Obviously, without the problems in those countries, Italy’s interest rates would be lower.”
Italian borrowing costs have climbed since March as Spain followed the governments of Greece, Ireland and Portugal in seeking European bailout funds. Spanish streets were filled with tens of thousands of protesters late yesterday after the government introduced a 65 billion-euro ($79 billion) austerity package that failed to contain interest rates.
“The contagion is that unease hitting through the markets in terms of bigger uncertainty, lower confidence towards the euro’s integrity, higher interest rates,” Monti said.
To contact the reporters on this story: Lorenzo Totaro in Rome at firstname.lastname@example.org; Andrew Frye in Rome at email@example.com.
To contact the editor responsible for this story: James Hertling at firstname.lastname@example.org