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Italy auctioned 7 billion euros debt to bolster up investors confidences

Italy auctioned 7 billion euros debt to bolster up investors confidences
Italy auctioned 7 billion euros debt to bolster up investors confidences

Italy auctioned 7 billion euros of debt to bring the total added this week to almost 20 billion euros, underscoring how the European Central Bank is helping the world’s fourth-biggest borrower tap markets, according to Bloomberg.

Today’s sale by the Treasury in Rome fell short of the 8.5 billion-euro aimed at even as borrowing costs declined from last month. Italy sold 9 billion euros in bills yesterday at about half the rate of the previous sale last month in its first auction since the ECB loaned 489 billion euros to banks to ease credit amid the region’s debt crisis.

“I’m an economist and realize that the measures we’ve adopted have many negative points,” said Monti, calling for a “European” solution to the debt crisis. “We aren’t the ones who set goals like balancing the budget in 2013

“Italy was not able to raise the maximum amount they wanted to, but the fact that they managed to sell this much at the end of the year should be taken as a positive sign,” said Eric Wand, a fixed-income strategist at Lloyds TSB Bank Plc in London. “The level of excess liquidity from the ECB will remain elevated for a while and some of that may get recycled into sovereign debt. That should support short-dated peripheral bonds.”

With an economy sinking into its fourth slump since 2001, Prime Minister Mario Monti’s government is expected to increase almost half a trillion euros from bond and bill sales next year. According to Swiss lender UBS AG, it has to repay about 53 billion euros in bonds in the first quarter from the region’s total maturing bonds of 157 billion euros.