Italy's borrowing costs skyrocket at auction
Italy's borrowing costs on its six-month bonds jumped Wednesday to their highest level since December in the face of German opposition to Premier Mario Monti's call for joint action to ease Europe's debt crisis.
The Italian Treasury sold off €9 billion ($11.23 billion) in short-term bonds, but the interest rate it had to pay rose to 2.96 per cent from 2.10 per cent a month ago. The rate was also the highest since the end of 2011, when Italy was at the forefront of Europe's debt crisis concerns.
The auction came a day after German Chancellor Angela Merkel reportedly told German lawmakers there won't be a full shared debt liability in Europe "as long as I live".
Monti, meanwhile, has backed the idea of jointly issued eurobonds as a way out of the crisis.
"Italy is safe from immediate risk, but it isn't (safe) from fundamental risks, just like the rest of Europe," Monti said in a speech Wednesday night in Brussels, the Italian news agency LaPresse reported.
The economist-premier has also pushed hard to reform Italy's labour market to help create new jobs.
Italy's lower Chamber of Deputies gave final parliamentary approval Wednesday to a package of reforms making it easier to fire workers. Italian business leaders have long complained that strict limits on firing workers make them reluctant to take on new hires who they might not be able to lay off if the economy lags.
Monti's government insists the reforms also protect workers by discouraging the growing use of short-term contract workers who enjoy limited or no benefits and rights.
Appointed to save Italy from financial disaster in the spreading eurozone crisis, Monti's government of technocrats has so far enjoyed wide support in parliament, and the labour reform was approved by a comfortable margin.