Italy agrees to IMF supervision

Italy will allow the IMF and the EU to monitor its efforts to implement reforms aimed at easing the pressure on the country’s finances.

A source told Reuters that the move is intended to give credibility to the proposed targets of reforming pensions and labour markets and carrying out privatizations.

The EU and IMF will each report separately on the country’s progress.

"Italy has no problem with surveillance at all, even with the IMF being involved," the source said.

Yields on the country’s 10-year bonds rose over six per cent this week on doubts about the country’s ability to repay a national debt worth 120 per cent of GDP.

Prime Minister Silvio Berlusconi has suffered calls to resign from former parliamentary allies.

The beleaguered premier has been struggling to get the reforms through his cabinet, with loyalists blaming finance minister Giulio Tremonti.