The European Commission urged Italy to launch more economic reforms and act faster to keep Rome at bay from the euro zone debt crisis, in a report by EU auditors seen by AFP today.
"Italy must quickly step up to the formidable challenge it is facing," the EU's executive arm said in the report drafted after a mission to Rome and which will be discussed at a meeting of euro zone finance ministers this afternoon.
"To be credible, the agenda should be ambitious, overarching, but also detailed and time-bound," the document said. "To help reverse market mood, the key reforms should be frontloaded," it added.
The commission said "additional steps are necessary to secure the announced deficit targets," and "additional measures are also required to rekindle growth."
Italy 3-year rate jumps to record high
Italy paid record yields of nearly 8% to sell three-year government bonds today, a level seen driving its debt burden out of control if sustained over time.
The yield on a new three-year bond soared to a euro lifetime high of 7.89% at the closely watched auction which allowed Rome to raise €7.5 billion. The amount was close to the top of a targeted range of between €5-8 billion.
The new November 2014 issue carries a 6% interest rate, the highest for this maturity from 1997. Only a month ago, Italy had paid a 4.93% yield to sell three-year paper.
The yield on a 10-year government bond due in March 2022 rose to 7.56%, marking a new euro lifetime high, from 6.06% at the end of October.
Rates this high are considered unsustainable in the long term for Italy, which is struggling to reduce an unwieldy debt mountain of €1,900 billion - around 120% of its GDP.
The head of the International Monetary Fund, Christine Lagarde, said yesterday that the fund had not received any request for help from Italy amid rumours of a bailout of up to €600 billion for the ailing economy.
Money floods out of Greek banks
Greece's central bank has said bank deposit outflows reached €13-14 billion in the September-October period.
"In September and October, two very bad months due to political uncertainty, we had a loss of €13-14 billion," Bank of Greece Governor George Provopoulos told a parliamentary committee. Provopoulos said bank deposit outflows continued in the first 10 days of November.
