Italy’s government says it is committed to reducing the budget deficit to an EU limit this year even as it faces the hurdle of a deeper economic slump.

Italy’s economy will begin emerging from its longest slump since the Second World War in the fourth quarter of this year and should grow through 2014, its economy minister Fabrizio Saccomanni said.

ITALIAN and Spanish 10-year bonds dropped yesterday, pushing yields up to euro-era records versus benchmark German bunds, on concern that slowing growth will hamper efforts to tame the nations’ debt loads.