Milan

Italy-German spread holds steady at 248 basis points

Milan jumps while other European markets march on the spot

Italy-German spread holds steady at 248 basis points

Milan, September 11 - Milan gained more than 1% in trading Wednesday, one of the few European financial markets to show much strength only one day after several jumped to three-month highs. The FTSE-Mib climbed by 1.33% to close trading at 17,562 points while the spread between Italian and German bond rates held steady despite continued high tension between the two political parties in Italy's governing coalition. Italy's fragile coalition government remained deadlocked over the question of whether to eject ex-premier Silvio Berlusconi from his Senate seat over his first definitive criminal conviction. Berlusconi's People of Freedom (PdL) party has warned Democratic Party (PD) Premier Enrico Letta that his government will fall if a Senate panel rejects PdL efforts to delay a vote to strip Berlusconi of his parliamentary seat over his tax fraud conviction. Berlusconi risks losing his Senate seat under the terms of an anti-corruption law approved in 2012, which the PdL says is unconstitutional. Markets seemed to take the turmoil in stride. Even bond markets were calm as the spread between Italy's 10-year bond and its German counterpart narrowed to 248 basis points Wednesday, barely changed from Tuesday's close of 250 basis points. The yield on Italian 10-year paper closed at 4.52%. The spread between lending rates in the two countries is seen as an indication of investor faith in the Italian economy and its ability to cope with a lingering recession. On other European markets, Spain's IBEX 35 gained 0.84% to 8,875.20 points while Frankfurt's DAX rose by 0.58% to close at 8,495.73 points. In Paris, the CAC 40 was essentially unchanged, closing at 4,119.11 points, as was the case in London, where the FTSE index of leading British shares held steady to close at 6,588.43 points.

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