{"page":"\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/resources-c03aa079.css\" /\u003e\n\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/lp_boclips_stylesheets-517835be.css\" media=\"all\" /\u003e\n\u003cdiv data-title='Italy raises US$3.95 billion over five years but rates up again' data-url='/boclips/videos/5c54be80d8eafeecae13c1ed' data-video-url='/boclips/videos/5c54be80d8eafeecae13c1ed' id='bo_player_modal'\u003e\n\u003cdiv class='boclips-resource-page modal-dialog panel-container'\u003e\n\u003cdiv class='react-notifications-root'\u003e\u003c/div\u003e\n\u003cdiv class='rp-header'\u003e\n\u003cdiv class='rp-type'\u003e\n\u003ci aria-hidden='true' class='fai fa-regular fa-circle-play'\u003e\u003c/i\u003e\nVideo\n\u003c/div\u003e\n\u003ch1 class='rp-title' id='video-title'\u003e\nItaly raises US$3.95 billion over five years but rates up again\n\u003c/h1\u003e\n\u003cdiv class='rp-actions'\u003e\n\u003cdiv class='mr-1'\u003e\n\u003ca class=\"btn btn-success\" data-posthog-event=\"Signup: LP Signup Activity\" data-posthog-location=\"body_link_boclips\" data-remote=\"true\" href=\"/subscription/new\"\u003e\u003cspan\u003e\u003cspan\u003eGet Free Access\u003c/span\u003e\u003cspan class=\"\"\u003e for 10 Days\u003c/span\u003e\u003cspan\u003e!\u003c/span\u003e\u003c/span\u003e\u003c/a\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-body'\u003e\n\u003cdiv class='rp-info'\u003e\n\u003cdiv aria-label='Hide resource details' class='rp-hide-info' role='button' tabindex='0'\u003e\u0026times;\u003c/div\u003e\n\u003ci aria-label='Expand resource details' class='rp-expand-info fai fa-solid fa-up-right-and-down-left-from-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003ci aria-label='Compress resource details' class='rp-compress-info fai fa-solid fa-down-left-and-up-right-to-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003cdiv class='rp-rating'\u003e\n\u003cspan class='resource-pool'\u003e\n\u003cspan class='pool-label'\u003ePublisher:\u003c/span\u003e\n\u003cspan class='pool-name'\u003e\n\u003cspan class='text'\u003e\u003ca data-publisher-id=\"30356011\" href=\"/search?publisher_ids%5B%5D=30356011\"\u003eCurated Video\u003c/a\u003e\u003c/span\u003e\n\u003c/span\u003e\n\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-description'\u003e\n\u003cspan class='short-description'\u003e1. Professor Raffaele Oriani working at his computer, in his office at Luiss University2. Close-up of Professor Raffaele Oriani3. Close-up of finance books 4. SOUNDBITE (English) Raffaele Oriani, Luiss University, Professor of Corporate...\u003c/span\u003e\n\u003cspan class='full-description hide'\u003e1. Professor Raffaele Oriani working at his computer, in his office at Luiss University\u003cbr/\u003e2. Close-up of Professor Raffaele Oriani\u003cbr/\u003e3. Close-up of finance books \u003cbr/\u003e4. SOUNDBITE (English) Raffaele Oriani, Luiss University, Professor of Corporate Finance:\u003cbr/\u003e\"So, this a record rate for the five years BTP (Italian Government Bonds), since 1997, so it's the highest rate since Euro introduction, this is happening because the auction reflects the condition of the secondary markets. So until the Spread (Benchmark between Italian BTP and German Bond) is so high on Italian government bonds, also when Italian government is issuing new bonds, (Italy) is going to pay this rates to convince  investors to buy the bonds.\"\u003cbr/\u003e5. Close-up monitor screen showing auction information for the 5-year Italian BTP on website of Italian Treasury www.tesoro.it \u003cbr/\u003e6. Monitor screen showing Italian treasury website with BTP auction information  \u003cbr/\u003e7. SOUNDBITE (English) Raffaele Oriani, Luiss University, Professor of Corporate Finance:\u003cbr/\u003e\"This is not necessarily a negative signal, the fact that there is a demand for this bond exceeding the offer is a signal that investors still find Italian bonds interesting, in terms of risk-return combination, so they clearly find that a 6.5 percent interest rate on 5-year BTP is good even with the risk of the sovereign debt.\"\u003cbr/\u003e8. Monitor screen showing treasury website with auction results document showing net interest rates for 5-year BTP just sold at 4.75 percent\u003cbr/\u003e9. Close-up 4.75 percent net interest earning of 5-year BTP auctioned on Wednesday\u003cbr/\u003e10. SOUNDBITE (English) Raffaele Oriani, Luiss University, Professor of Corporate Finance:\u003cbr/\u003e\"Last week the exclusion of the UK from the agreement and the fact that the agreement is still incomplete is clearly making pressure on the rates of sovereign debts for all of those countries that have greater problems. It concerns instead the possibility of Italy to still sustain this level of debt so far these are still affordable rates according to the Italian policy makers.\"\u003cbr/\u003e11. Tilt down on monitor screen showing treasury website document with gross earning of 6.47 percent highlighted at the end of document\u003cbr/\u003e12. SOUNDBITE (English) Raffaele Oriani, Luiss University, Professor of Corporate Finance:\u003cbr/\u003e\"For what concerns the possible action that Monti's government can take in the near future, clearly we all know that the approval of this austerity plan is a critical condition. At the moment we cannot even forecast what will happen if this austerity plan was not approved by the parliament so this level of Spread (benchmark Italian BTP compared to German Bund) and this level of interest rate makes the approval of the austerity plan even more urgent than before.\"\u003cbr/\u003e13. Professor Oriani working on laptop\u003cbr/\u003e14. Monitor screen showing Bloomberg website with Italian stock market index FTSE MIB negative trend at opening on Wednesday\u003cbr/\u003eItaly's last bond auction of the year saw the country having to pay higher borrowing rates to get investors to lend it the money it needs to rollover its big debts.\u003cbr/\u003eWednesday's auction showed that the debt-riddled country paid an average yield of 6.47 percent for investors to lend it three (b) billion euro (3.95 (b) billion US dollars) over five years.\u003cbr/\u003eThe yield was up 0.17 percentage point from last time Italy looked to raise money over five years and was the highest rate since 1997. The euro came into existence in 1999\u003cbr/\u003eRaffaele Oriani, Professor of Corporate Finance at Luiss University, said the bond rate reflected the condition of the secondary market and said it seemed likely that Italy would have to continue to pay higher interest rates to convince investors to buy the bonds for the foreseeable future.\u003cbr/\u003eBut despite the higher rates, Oriani did not see it as a completely negative result due to the high number of requests to buy treasury bonds approximately 4.25 (b) billion euro (5.52 (b) billion US dollars) as opposed to three (b) billion euro worth of bonds that were available.\u003cbr/\u003eItaly has seen its borrowing costs, both in the markets and in bond auctions, rise markedly over the past few months as investors have grown increasingly worried over the country's ability to deal with its debts, which total around 1.9 trillion (2.5 trillion US dollars), or around 120 percent of its GDP (Gross Domestic Product).\u003cbr/\u003eIt is considered too big to bail out by its partners in the 17-country eurozone.\u003cbr/\u003eLast week, British Prime Minister David Cameron blocked German Chancellor Angela Merkel's  push to bring all 27 EU members together for treaty changes, leaving London isolated.\u003cbr/\u003eBut Oriani said Cameron's decision to veto the deal along with the fact that the agreement has not been ratified were two factors putting extra pressure on the sovereign debt of eurozone countries that have economic problems which includes Italy. \u003cbr/\u003eAs the auction took place, Premier Mario Monti, a technocrat whose appointment was intended to reassure markets that Italy was serious in reforming its finances, faced a protest in the Italian parliament by senators opposed to his government's austerity plans, forcing a brief suspension of the session.\u003cbr/\u003eMonti told the Senate Wednesday that his government might consider enacting the so-called Tobin tax on financial transactions as a means of reducing the tax burden on families. \u003cbr/\u003eSuch a tax had been rejected by the Berlusconi government.\u003cbr/\u003eThere have been growing signs of discontent as Monti has rolled out the painful measures, which are expected to be approved by parliament in the next few days before the Christmas break.\u003cbr/\u003eOriani said the Italian economic recovery was dependent on the approval of the austerity plan.\u003cbr/\u003e\"At the moment we cannot even forecast what will happen if this austerity plan was not approved by the parliament so this level of Spread (benchmark Italian BTP compared to German Bund) and this level of interest rate makes the approval of the austerity plan even more urgent than before,\" he added.\u003cbr/\u003eOn Monday, unions protested against the spending cuts and tax increases the government is seeking to restore investor confidence. Monti has indicated he would make a few small concessions to help families but made clear his intention to push through the entire package.\u003cbr/\u003eInvestors clearly remain worried about the future of both Italy and the wider 17-nation eurozone despite an EU deal last week to tighten controls on spending. 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