‘Monti Effect’ Fizzles Before $574 Billion New Year: Euro Credit
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Prime Minister Mario Monti’s market honeymoon is ending as Italian bond yields approaching 7 percent signal mounting concern his government may struggle to sell 440 billion euros ($574 billion) of debt next year.
Monti took just five weeks in office to push through a 30 billion-euro emergency budget package aimed at taming surging borrowing costs. Investors reacted to the plan’s final approval by the Senate yesterday by driving up the yield on Italy’s 10-year benchmark bond by 12 basis points to 6.91 percent, close to the 7 percent level that prompted Greece, Ireland and Portugal to seek bailouts. It was at 6.94 percent at 10:13 a.m. in Rome.