Messy Election Results Raise Italy's Borrowing Costs
As would be expected, the fiasco caused by national elections in Italy have raised borrowing costs. Bickering over which party should control the government could go on for weeks. New national elections may have to be called. Some candidates have said they will reject austerity, which could drive up both Italy's deficit and national debt.
According to Bloomberg:
Italy's borrowing costs jumped at an auction of bonds today as inconclusive elections triggered renewed concern Europe's debt crisis may deepen.
The Treasury in Rome today sold 4 billion euros ($5.24 billion) of a new 10-year bond at 4.83 percent, up from 4.17 percent at an auction of similar maturity debt on Jan. 30 and the highest since Oct. 30. The Treasury also sold 2.5 billion euros of bonds due in 2017 to yield 3.59 percent compared with 2.94 percent last month.
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