Italy was able to borrow its target level of €4.5 billion in its latest bond auctions this morning as pressure on its borrowing costs eased again.
The Italian treasury received bids for almost €8.6 billion, which allowed it to borrow its maximum target of €4.5 billion at affordable rates, data from the Bank of Italy showed.
Italy sold €3 billion in zero-coupon bonds due in January 2014 at a rate of 3.013%, compared with 3.763% for the last similar operation on January 26.
The treasury also sold €753.5m due in 2016 at a rate of 2.7% and €746.5m in bonds due in 2019 at a rate of 3.19%. Italy is set to return to the market on Monday with an auction of short-term bonds. Its borrowing costs have lowered sharply since the start of the year.
Benchmark 10-year bonds currently have a yield of around 5.5% on the secondary market compared with around 7% at the end of 2011 - a level seen as unsustainable over the longer-term. Italy is set to sell some €450 billion in bonds this year.
Italy to scrap Catholic property tax loophole
Italy has adopted a draft bill to scrap a controversial tax exemption for Catholic Church property in a move that could raise an extra €600m a year.
The law now allows businesses operating out of Church property such as hotels and restaurants not to pay property tax as long as the building also has some religious function, such as a chapel or an adjoining monastery.
The government promised this month to remove the exemption following an outcry among many Italians who are already hard pressed by an austerity drive that has raised taxes and slashed budgets to avoid bankruptcy.
Prime Minister "Mario Monti informed the cabinet that he has presented an amendment to the Senate on the immediate abrogation of rules on exemption for properties where commercial activity is not exclusive," the cabinet said.
Property that is exclusively for non-commercial use such as churches will continue to be exempt from tax. The European Commission had opened an investigation into the loophole in 2010 on suspicion of anti-competitive behaviour.
The Italian Catholic Church - considered separate from the Vatican state, which has sovereignty - owns around 100,000 properties worth €9 billion including churches, schools, universities and hospitals. It also owns properties mainly aimed at tourists such as the French restaurant "Eau Vive" and the four-star hotel "Ponte Sisto" in Rome.
