Italy paid lower rates at a bond auction today when it raised €3.8 billion in three batches for 3 year, 7-year and 9-year debt.
The outcome was another signal that investors are showing some confidence in Italy, the Bank of Italy said.
At the end of last year Italy was widely seen as being the next euro zone country to fall into a debt crisis.
Italy is struggling with a public debt mountain equivalent to 120% of GDP
The rate on zero coupon bonds due in 2014 was 2.352% compared to 3.013% for the last comparable operation on February 24.
The bonds due in 2019 sold at 3.06% compared to 3.19% previously and bonds due in 2021 at 3.45% from 4.61% before. Total bids for the debt were at €7.3 billion.
Prime Minister Mario Monti came to power in November last year after his predecessor Silvio Berlusconi was ousted by a parliamentary revolt and a wave of panic on the financial markets for the euro zone's third biggest economy.
He has implemented a round of strict austerity measures and launched reforms to free up the economy, cut bureaucracy and overhaul the labour market in a bid to end the recession that Italy entered in the second half of last year.
Italy is struggling with a public debt mountain equivalent to 120.1% of its gross domestic product and has to raise around €450 billion through bond auctions this year.
