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Uncertainty surrounding Italy’s austerity package helped push the country's five-year credit default swap spread out to four percentage points. The country came under pressure amid warnings that the government's recent flip-flopping on its austerity plan could fuel new market concerns over the economic and political stability of the eurozone's third-largest economy. The European Central Bank President said it is extremely important that the country fully implements the fiscal measures that the government announced August 5 to reduce its budget deficit and restore market confidence rapidly.
In Greece as well, a disagreement over its international bailout package startled investors from the open. A Greek official had said the visiting troika of international inspectors was suspended amid a dispute over the country's ability to meet its deficit targets.
The delegation of European Union, International Monetary Fund and ECB officials is expected to return in about 10 days after the Greek government has prepared the draft outlines of its 2012 budget.