ROME, Jan 3 (Reuters) - Outgoing Italian Prime Minister Mario Monti said on Thursday that the difference between the yield on Italian and German benchmark bonds had narrowed thanks to a return of investor faith in Italy and said he hoped the trend would continue.
"It (the difference) has narrowed also due to the return of confidence in Italy by foreign and Italian capital, and I hope this is a phenomenon that will last," Monti told Rai television programme Uno Mattina.
The spread, or difference in interest rates on Italian 10-year government bonds and safer German Bunds - lay on Thursday at around half the level it was when Monti took office about 13 months ago.
The former European Commissioner announced last week that he would be a candidate in the February national election at the head of a centrist bloc. On Thursday he reaffirmed his goal to stem the rise of what he called extreme political groups, saying that they had hindered the reform process in Italy.
Monti also said the next government should aim to reduce taxes gradually alongside public spending controls, and continue to fight tax evasion. He said he was not considering introducing an annual wealth tax levy if he wins the next election, but that it would not be a taboo topic for him.