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.

YIELDS on government securities from Greece, Ireland and Portugal reached records amid speculation the heavily indebted nations won’t be able to avoid restructuring.

REPORTS that the EU was preparing for a Greek default were rubbished by the European Commission yesterday but investors appeared to like the idea and the euro moved up a little against the US dollar.