ROME (AP) — Italy saw investors more willing to part with their cash Wednesday as it raised €10.7 billion ($14 billion) in a pair of auctions, a sign that market jitters have eased as the country presses ahead with its austerity measures.
The Bank of Italy said the average yield on its €9 billion ($11.8 billion) six-month offering was 3.251 percent, half the 6.504 percent rate it had to pay at the equivalent auction last month.
An auction of two-year bills, which raised €1.732 billion, also saw the yield fall to 4.853 percent from 7.814 percent last month.
Italy is the eurozone’s third-largest economy and is considered too big to save under the eurozone’s current bailout facilities.
Markets have grown fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around €1.9 trillion ($2.5 trillion).
Mario Monti, the country’s new premier, got parliamentary approval last week for a big austerity package that is intended to save the country from financial disaster, with tax hikes and reforms to Italy’s bloated pension system.
Later Wednesday, Monti is to chair a Cabinet meeting on a second wave of measures designed to boost Italy’s anemic economy, which is expected to enter into recession in the first quarter of the new year.
The market responded positively to the auctions, with Italian shares up 1.2 percent and the yield on the country’s ten-year bond back down at 6.74 percent.
On Tuesday, the yield had spiked over 7 percent — a level that is considered unsustainable in the long run and eventually forced Greece, Ireland and Portugal to seek outside financial help.
