Ireland steps towards bailout exit yet Italy sees its costs rise

City A.M. Reporter
THE IRISH state successfully sold €5bn (£4.34bn) of new debt yesterday, taking its biggest step yet towards exiting its European bailout later this year.

Yet elsewhere in the Eurozone, Italy had to pay its highest three-year borrowing costs since December as it pays the price for political paralysis that triggered a credit rating cut last week.

Italy’s Treasury paid a yield of 2.48 per cent to sell €3.3bn of three-year bonds, up from 2.3 per cent at a similar sale in February which itself marked a sharp rise from the previous auction.

It also sold €2bn of a 15-year bond it first issued in January, paying a yield of 4.9 per cent compared with 4.81 per cent at the initial sale.

Progress was much rosier in Ireland, however, where the sale of its new benchmark 10-year bonds meets nearly all its funding needs through next year.

“There has been an extraordinary response to it and I don’t think you will have heard me use the word extraordinary before,” finance minister Michael Noonan said.

“This brings us within about a billion and a half towards what we need to the end of 2014.”