Debt Crisis Moves to Italy

EU's largest borrower sees rates rise as its bonds fall for seventh day.

The plunge in Italian markets overshadowed policy makers’ efforts to fix Greek finances as the euro-region’s debt crisis infected Europe’s largest borrower.

Italian bonds fell for a seventh day and the nation’s borrowing costs jumped by more than half at an auction of 6.75 billion euros ($9.4 billion) of bills today. Stocks pared declines after falling to a two-year low. Warnings by Moody’s Investors Service and Standard & Poor’s over Italy’s ability to trim debt, coupled with infighting in Silvio Berlusconi’s government over a budget-cutting plan, fueled the sell-off.

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