Italians blame Spain for 41% jump in their 3 year borrowing costs over one month!
The Italian Treasury held a bond auction today during which it sold 2.89 billion euros of three-year bonds, somewhat less than the 3 billion on offer. The bonds maturing in March 2015 were sold at a yield of 3.89% (in comparison with 2.76% the country had to pay at the previous auction in March). One-year debt costs had also gone up at an auction held the day before.
Italian officials blamed Spain for this outcome, claiming that it was a contagion effect from the country's debt crisis.
A sudden rise in short term interest rates is one thing, but a 41%jump in costs for 3 year loans must surely be simply horrendous and previously unknown beyond banana republics and third world countries with undeveloped economies. Surely this is not what the EU replaced the elected government of Italy to achieve? How long for Monti now one must wonder?