Talk of ‘Italy next for bailout’ draws angry rebuke

Raising the stakes in Europe’s debt crisis, Austria’s finance minister said Italy may need a financial rescue due to its high borrowing costs, drawing a furious rebuke from the Italian prime minister.

Maria Fekter’s assessment of the eurozone’s third-largest economy stoked investors’ fears that Europe is far from ending two years of turmoil — a feeling reinforced by Dutch Finance Minister Jan Kees de Jager, who said the eurozone was “still far from stable”.

A deal by eurozone finance ministers on Saturday to lend Spain up to €100bn to recapitalise its banks was seen by many in the markets as yet another sticking plaster. Spanish 10-year bond government yields soared to 6.81%, their highest level since the euro’s launch in 1999.