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Prime minister's pledge to settle all existing arrears draws praise, but 132.6 percent debt-to-GDP ratio remains cause for concern.
Lowest yield in almost two years follows German court's OK of ECB bond buys.
Borrowing costs decline at Italys auction after Moodys cuts bond rating.
German Chancellor praises Italys work on overhauling its economy.
Italian bond yields rise amid concern about 2012 debt issuance.