Italy borrowing costs down to 6.4%

Italian borrowing costs are well below dangerous levels as markets express confidence in the prospect that leading economist Mario Monti will form a new government without politicians.

Italian president Giorgio Napolitano tapped Mr Monti on Sunday to create a government of experts to implement structural economic reforms aimed at bringing down Italy’s stubbornly high public debt.

Today, borrowing costs on benchmark 10-year bonds were at 6.4% – after spiking last week well above the 7% level that forced three other countries to seek bailouts.

Italy later will sell up to €3bn in five-year bonds in a fresh test of market sentiment.