Italy minister says lower yields free room for tax cuts, investment

ROME Fri Jan 3, 2014 7:17am EST

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ROME Jan 3 (Reuters) - A lowered premium on Italian debt over German Bunds shows markets appreciate the government's work and will free up resources for investment and tax cuts, Italy's economy minister said on Friday.

"This will result in lower interest payments on the public debt and the possibility of having more resources for investment and reducing the tax burden," Fabrizio Saccomanni said in a statement.

Earlier on Friday 10-year Italian yields fell as low as 3.935 percent, pushing the premium over benchmark German Bunds to below 200 basis points for the first time since July 2011, before the euro zone crisis reached its height and forced former Prime Minister Silvio Berlusconi from office.

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