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Italy confirms talks with China's CIC

Reported by AAP
Tuesday, September 13, 2011
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Italy's finance minister has met with the head of China's largest sovereign wealth fund CIC as Rome tries to bring down soaring borrowing interest rates, a ministry spokesman says.

Finance Minister Giulio Tremonti met with a Chinese delegation in the Italian capital last week, including Lou Jiwei, the head of the China Investment Corporation, the spokesman told Agence France-Presse on Tuesday, without giving details.

According to the Financial Times, the talks addressed the possibility of China buying Italian bonds, a move Rome hopes will reassure skittish markets.

The delegation also met with representatives from the Cassa Depositi e Prestiti (CDP), an Italian government investment vehicle, the CDP said.

The talks between the Italian government and Beijing saw stocks rebound on Wall street in late afternoon trading on Monday, cutting earlier losses.

At the beginning of August, the head of the Italian Treasury, Vittorio Grilli, travelled to Asia to meet with investors over the possible purchase of Italian bonds.

Grilli visited China, Hong Kong and Singapore to meet with sovereign wealth funds and private investors.

China has been working to boost market confidence in Europe in countries such as Greece, Spain or Portugal.

Whether the news that China is interested in Italian assets will reassure investors could be seen as early as Tuesday, when Rome will place medium to long-term bonds.

A placement of 11.5 billion euros ($A15.26 billion) in three-month and 12-month bonds on Monday saw interest rates soar, the Bank of Italy said.

The European Central Bank's intervention on the bond markets at the beginning of August initially led to a drop in Italian bond interest rates but anxiety on the markets has seen the rates jump again over the past few days.

Italy has tried to reassure investors by announcing a new austerity package in August which should see the country balance its budget by 2013 and reduce it's enormous debt - which stands at 120 per cent of GDP.

After uncertainty by the government, the package was finally given a green light by the Senate and should be passed by the Chamber of Deputies by Wednesday, Prime Minister Silvio Berlusconi said on Monday.

01/11/2014 02:38Sydney, Australia. 1 November,2014
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