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Luca Bruno/AP

Italy pays nearly 8 per cent for three-year bonds

Italy faces its highest cost of borrowing ever, raising €3.5bn through the sale of three-year bonds at rates of 7.9 per cent.

THE EUROPEAN DEBT crisis has shown no signs of abating, as the Italian treasury was forced to pay another round of eye-watering interest rates in order to access money on the open markets.

The country successfully raised €7.5bn through the auction of various bonds this morning, but paid interest rates vastly above what was demanded on similar occasions in the past.

While demand for €3.5bn of bonds, maturing in three years’ time, was high, Italy was still forced to pay 7.89 per cent interest – up from 4.93 per cent charged when it auctioned similar bonds on October 28.

Italy also paid record rates for borrowing on a longer basis: the treasury sold €2.5bn of bonds maturing in 2022, with an average yield of 7.56 per cent, up from 6.06 per cent when the last round of similar debt was sold.

The other bonds, maturing in 2020, sold at a yield of 7.28 per cent – up from 5.47 on the last similar occasion.

The auction, though successful, follows similarly downbeat auctions by Belgium and Germany in the last few days.

Eurozone finance ministers hold talks amid fears of euro breakup

‘The situation in the euro area is rapidly deteriorating,’ says OECD

Belgium follows Italy, Germany in seeing borrowing costs surge

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8 Comments
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    Mute Donal Lynch
    Favourite Donal Lynch
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    Nov 29th 2011, 2:29 PM

    Welcome to the club, it’s the new way to invade and rape a country of everything , push bonds over 7% beats sending in the army.

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    Mute Alex simon
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    Nov 29th 2011, 9:52 PM

    Well, its a fact the goverment has printed punts…. Its a matter of time before euro goes…… Tick tock… Its 80% probable we wont have the euro next year… If I were u i would buy sterling now….

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    Mute Jimmy McCann
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    Nov 29th 2011, 2:41 PM

    Italy’s obviously buying time because at those rates of interest it makes sense to go cap in hand to the trioka. There must be a last ditch plan afoot in Europe to save Italy and Spain…and the Euro at this stage too I suppose. I bet that plan will fail if any of the last few plans are anything to go by.

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    Mute Tim Henchin
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    Nov 29th 2011, 4:14 PM

    There hasn’t been a plan in the last three years of this crisis. Just bluff and lies. I can’t see that changing.

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    Mute Kerry Blake
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    Nov 29th 2011, 2:47 PM

    Italy cannot go on much longer at that rate. €300 billion of debt to roll by the end of April?

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    Mute Tony Skillington
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    Nov 29th 2011, 6:05 PM

    Germany was kicking us up the road to the bailout at 7% and here’s Italy at 8% and they’re kicking to touch…just shows how unbalanced and unfair the whole European model is….

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    Mute Cyril Butler
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    Nov 29th 2011, 7:10 PM

    To be fair to Germany they cant bail out Italy. It is too big. Im sceptical of even the IMF getting involved. The Germans idea of forcing a bailout on Ireland was exactly to avoid what we have now. I think the Euro is too late to save. I think all the big economists know this but are too concerned of jittering the markets even more.

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    Mute Peter Carroll
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    Nov 29th 2011, 9:47 PM

    Fair doesn’t enter into it. Only what’s possible. We may end up being thankful that we were first into the lifeboat. Sranger things have happened.

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