MILAN, Oct 30: Italy raised 7.0 billion euros in long- and medium-term bonds at a lower rate on Tuesday, the Bank of Italy said, in spite of an air of political uncertainty in the recession-hit country.

The Treasury issued 4.0 billion euros in five-year bonds at a rate of 3.8 per cent, compared with 4.09 per cent at the last similar operation. It also issued 3.0 billion euros in bonds due to expire in 10 years time at 4.92 per cent, down from 5.24 per cent on September 27.

The sale came after a regional vote in Sicily which saw ex-premier Silvio Berlusconi’s centre-right People of Freedom (PDL) party defeated by the centre-left, a high level of voter abstention and a growing populism movement.

The result deepens political uncertainty, with divisions and bickering within the main parties aggravated by Berlusconi’s comments on the weekend that he was evaluating whether to pull its support for Prime Minister Mario Monti.

During a visit to Spain on Monday, Monti said he refused to consider Berlusconi’s comments as a threat — but merely repeated his concern that “the spread levels between Italy and Germany are unjustifiably high.”—AFP