The International Monetary Fund will send officials to Rome next week to assess Italy’s efforts to balance its budget and reduce debt as Prime Minister Mario Monti tries to bring down borrowing costs.
“A small team from the IMF will visit Rome next week to meet with the new authorities, receive updates on recent budgetary developments, and discuss modalities for future monitoring missions,” fund spokesman William Murray said in an e-mail today. Deputy Director Aasim Husain and adviser Antonio Spilimbergo of the IMF’s European department will be going to Italy, Murray said.
Italy today had to pay the most in 14 years to sell five- year bonds as Parliament rushes to pass a 30 billion-euro ($39 billion) budget plan. The Treasury sold 3 billion euros of the bonds, the maximum for the sale, to yield 6.47 percent, the most since May 1997 and up from 6.29 percent at the last auction on Nov. 14. Demand was 1.42 times the amount on offer, compared with 1.47 times last month.
Monti’s Cabinet approved on Dec. 4 a sweeping budget plan aimed at raising revenue and boosting Italy’s anemic growth to persuade investors Italy can tame the region’s second-biggest debt and avoid a bailout. Parliamentary committees signed off on the amended plan last night, paving the way for a vote this week in the lower house. Monti has warned that failure to approve it could lead to Italy’s “collapse” and threaten the survival of the single currency.
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