MILAN: Italy paid higher yields to sell 5- and 10-year bonds on Thursday, penalised by rising political instability and the risk of disciplinary measures from the European Commission over budget slippage.
Rome must provide by Friday explanations to Brussels about the deterioration of its public finances and the Commission will decide next week whether to take action.
At the same time, infighting within Rome's coalition government has intensified after a vote for the European parliament this month, raising the risk of early polls.
The Treasury still managed to raise the top planned amount of 6 billion euros ($6.68 billion) over four bonds. Analysts said the relatively limited size of the sale had helped the market to absorb it, despite the lack of redemption flows in June and July.
A five-year bond due in July 2024, was sold at a gross 1.81pc yield, the highest since November last year, compared with 1.72pc at the previous auction last month.
A 10-year bond due in August 2029, fetched a gross yield of 2.60pc, in line with the 2.59pc level of the end-April's auction.
The Treasury also sold a 2025, nominal bond no longer offered on a regular basis, along with a floating-rate CCTeu certificate that fetched a gross 1.95pc yield, compared with 1.77pc last month.
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