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Berlusconi says spread a 'con', doesn't matter

11/12/2012

'Invention to bring down elected majority' says ex-premier

Berlusconi says spread a 'con', doesn't matter

Rome, December 11 - Ex-premier Silvio Berlusconi said Tuesday that Italy's bond spread was a "con" and suggested it did not matter. The yield spread between 10-year Italian bonds and the German is considered by experts to be a barometer of Italy's borrowing costs and of investor faith in the country's ability to weather the eurozone crisis. "The spread is a con, it's an invention with which an attempt was made to bring down the majority (in parliament) that was voted in by the Italian people and which governed the country," Berlusconi told one of his Mediaset TV channels. "No one had heard of it before. It's only been talked about for a year. What do we care about it?". Berlusconi was forced to resign in November 2011 when Italy's debt crisis looked in danger of spiralling out of control after the spread hit peaks of over 500 basis points with yields of over 7%, levels considered unsustainable in the long term. The pressure on Italy's borrowing costs has eased since Premier Mario Monti's emergency technocrat administration replaced Berlusconi's government and passed austerity measures to put Italy's public finances in order. But the spread shot up by a 28 points on Monday after Monti announced at the weekend that he would quit when the 2013 budget law is approved. The announcement came after Berlusconi's People of Freedom (PdL) party said it had stopped backing Monti's administration and the media magnate said he would run for a fourth term at the helm of government in upcoming elections.