Spread climbs amid fears of Italian govt collapse

Berlusconi's PdL said would abstain in confidence vote

Spread climbs amid fears of Italian govt collapse

(see related story) Rome, December 6 - The spread between 10-year Italian bonds and the German benchmark shot up six points on Thursday after ex-premier Silvio Berlusconi's People of Freedom (PdL) party announced it was abstaining in a Senate confidence vote for a development bill. The move sparked fears the PdL may cause Premier Mario Monti's emergency government to collapse. The spread is an important barometer of market confidence in Italy's ability to weather the eurozone crisis. There has been speculation the PdL, the biggest party in parliament, could withdraw its support from the government to provoke early elections in which Berlusconi would stand for a fourth term as Italian premier. The spread edged up by one point to 311 after the opening of business on Thursday but then shot up to 317 following the PdL's announcement on the confidence vote.

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