Italy on the brink as investors ditch debt

ITALIAN borrowing costs have surged to their highest in more than four years as investors panic over the future of the country.

Investors dumped government bonds over fears Italy’s ruling anti-establishment coalition is about to embark on a dangerous spending spree. The parties in power have said they plan to run a budget deficit of 2.4pc next year – spooking international markets because it already has a massive £2.1 trillion debt pile.

There are also fears the European Union will not tolerate the plan, triggering a confrontation which could reignite the eurozone crisis.

Fears were stoked after Claudio Borghi of the ruling League party, said: ‘I am very convinced that with its own currency Italy would solve the majority of its problems.’

But Prime Minister Giuseppe Conte insisted Italy is committed to the euro. The jitters pushed the yields on ten-year bonds – which rise during a sell-off as the price of debt falls – up above 3.4pc, their highest since March 2014.