Huffington Post Italia leaked a government proposal late Tuesday showing that populist parties had drafted plans to ask the European Central Bank for debt forgiveness of €250 billion ($300 billion).
Eurozone bond markets turned chaotic Wednesday after leaked documents suggested Italian coalitions paving the way for a new administration were floating plans to ask for €250 billion ($300 billion) in debt forgiveness for the country.
The cost of borrowing in Italy hit its highest level in two months, with the 10-year bond yield jumping 14 basis points, to 2.082%, its biggest daily move in nearly a year. The two-year was up 17 basis points, to 0.11%.
Meanwhile, the spread between German and Italian 10-year bond yields, an indicator of financial stress in the eurozone, was up to 144 basis points from 129...