The euro zone crisis deal has not had any positive effect on yields in Italy, now the biggest problem for the European sovereign debt crisis. In fact, yields on Italian debt have increased significantly since that deal was done, perhaps due to the non-trigger of credit default swaps in Greece.
10-year Italian paper now trades at 6.17% and is poised to break through highs set in August. While the ECB and European leaders recognise that the ECB is the difference here, they are as yet unwilling to have the ECB declare itself Europe’s lender of last resort. And so this crisis in Italy will get worse and spread further to France, Belgium and Austria.
Also see the Reuters article: ECB doomed to bigger crisis role despite itself
