Italy’s Debt Cost Dips, but Its Economic Perils Remain

Last week, Mr. Monti won final approval of a $40 billion spending package of tax increases and a pension change aimed at eliminating Italy’s budget deficit by 2013. But with Italians starting to feel the pain and dissent growing in Parliament, Mr. Monti must act swiftly to stimulate Italy’s economy, which is already in recession and is expected by some forecasters to shrink in 2012.

On Wednesday, the day his cabinet met to discuss growth-boosting measures, Mr. Monti appeared to receive some breathing room when interest rates on six-month treasury bills, a barometer of investor worry about Italy’s creditworthiness, dropped in half to 3.2 percent and rates on 10-year treasury bills dropped to 6.91 percent from above 7 percent, nearing the levels at which other euro-zone countries such as Ireland and Greece needed bailouts.

Read Full Article from New York Times

- Posted: 2011-12-28 15:43:02

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