"As democracy is perfected, the office of the President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart's desire at last and the White House will be occupied by a downright fool and complete narcissistic moron." -H.L. Mencken 1920
ROME – Italy’s borrowing costs jumped to record levels on Friday, underlining its vulnerability at the heart of the eurozone debt crisis and skepticism about whether the struggling government of Prime Minister Silvio Berlusconi can deliver vital reforms.
The 6.06% yield paid at an auction of 10-year bonds was the highest since the launch of the euro and not far from the level reached just before the European Central Bank intervened in August to cap Rome’s borrowing costs by buying Italian paper.
Italy, the eurozone’s third largest economy, is once more at the centre of the debt crisis, with fears growing that its borrowing costs could rise to levels that overwhelm the capacity of the bloc to provide support amid chronic political instability in Rome.
Mr. Berlusconi in a speech in Rome said the record yield would weigh on the country’s finances, but insisted Italy would meet its target of balancing the budget by 2013.
Mr. Berlusconi, tainted by scandal and repeatedly at odds with his coalition allies, has promised European partners a package of measures to spur Italy’s stagnant economy and cut its towering public debt, but he has failed to convince markets made skeptical by his repeated failure to deliver reforms.