September 2, 2011
Concerns about the euro zone’s ability to cohesively respond to its debt crisis resurfaced Friday after talks between Greece and its foreign creditors were interrupted and the head of the European Central Bank warned Italy to stick to its austerity program.
Yields on 10-year Italian bonds rose almost a tenth of a percentage point, to 5.21 percent — well above the 5 percent level that policy makers consider the top desirable rate. The yield on Spain’s 10-year securities climbed slightly to 5.06 percent, despite passage in the lower house of the Spanish Parliament on Friday of an amendment that will enshrine stricter budgetary discipline in the Constitution.
Europe’s central bank began the extraordinary step of buying Italian and Spanish debt on Aug. 8 to help calm markets after 10-year rates spiked to around the 6 percent level.
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