29 Nov 2011

IMF loan assistance to Italy reported

5:15 am on 29 November 2011

It's been reported the International Monetary Fund could bail out Italy with up to 600 billion euros ($US794 billion).

Prime Minister Mario Monti is under pressure to speed up austerity measures. Italy was forced to pay record interest rates in a 10 billion euro auction of Treasury bills on Friday.

La Stampa newspaper reports the funding would give Mr Monti a window of up to 1½ years to implement budget cuts and reforms, by removing the necessity of having to refinance the debt.

It says the IMF would guarantee rates of 4% or 5% on the loan, far better than the borrowing costs on commercial markets.

Italy needs to refinance debt worth about 400 billion euros next year.