(ANSA) - Milan, October 9 - Jittery European markets ceded terrain on Tuesday, while German Chancellor Angela Merkel met Greek Premier Antonis Samaras in the Greek parliament building, with 40,000 demonstrators protesting outside against her presence and the threat of more austerity measures. Madrid's stock exchange suffered most, with the Ibex 35 index losing 1.85% to close at 7,745.40 points. Milan's FTSE MIB fell 0.37% to close at 15,504 points, while London's FTSE-100 slipped 0.54%. Frankfurt's DAX index and Paris's CAC 40 index sank 0.78% and 0.70%, respectively. The spread between Italian and German 10-year bonds rose three points to close at 363 basis points Tuesday. The yield on the Italian paper was 5.10%. The difference between interest rates on Spanish bonds and the German benchmark closed at 434 basis points. The yield on the 10-year Spanish bond was 5.82%. The bond spread is an important indicator of market confidence in the countries' abilities to pay down their huge public debts - and a distorted one necessitating continued reforms and sacrifices, according to the International Monetary Fund (IMF). Italy and Spain are paying higher bond-interest rates than the fundamentals of their economies would predict, while countries like the United States and Japan enjoy lower yields than would be expected of their economies, according to the IMF's Fiscal Monitor. Because of the financial pressure, Spain and Italy "must continue corrective measures to restore competitiveness and fiscal stability and to maintain growth", said the IMF's chief economist, Olivier Blanchard, on Tuesday.