Rome, December 3 - The yield spread between 10-year Italian bonds and the German benchmark fell below the 300-points mark Monday after the Greek government announced a plan to buy back a big chunk of debt from private creditors, reassuring investors wary of "peripheral" eurozone sovereign debt. European markets reacted largely positively to the announcement, racking up gains in early trading, although some gains were lost after a the latest manufacturing figures from the US and Europe were more downbeat than expected. Although the spread began climbing early Monday from Friday's close of 311 basis points, it set on a downward path after the Greek government announced its debt buyback plan, which calls for buying back up to half of the 62 billion euros the country owes private creditors. At its lowest on Monday, the spread - a key measure of Italy's borrowing costs and of market confidence in the country's ability to weather the eurozone crisis - descended to 292 basis ponits before closing at 304 points. The yield on 10-year bonds was 4.44%, the lowest level since last March. Commenting on the narrowing spread, Italian Premier Mario Monti said: "It's a positive day, we dropped to under 300". Speaking in Lyon, where he held a one-day summit with French President Franois Hollande, Monti tempered enthusiasm: "We are still at a level which is not acceptable and physiological, but it's nice to see a decreasing line. "However, I confess that for me there's a spread level at 287 basis points which represents a goal that I hope is reached," Monti said. The number is half of what it was when the former European commissioner assumed the head of a technocrat government last year, replacing Silvio Berlusconi amid a peak in the euro crisis. On the back of the debt deal, which boosted the financials-heavy FTSE-MIB, the Milan stock exchange closed up 0.43% at 15,876 after having at one point Monday breached the 16,000 mark. Unicredit, the best bank-performer Monday, gained 2.2%, followed by UBI Banca, up 1.53%, and Intesa Sanpaolo, up 0.93%. Other European indexes, bar Spain's IBEX 35 - down 0.6% at 7,889 - closed marginally higher, with Frankfurt's DAX up 0.4% at 7,435 and Paris's CAC 40 up 0.3% at 3,567. London closed essentially flat, at 5,871, up 0.08%.