Regardless of whatever the Italian leadership is trying and regardless of a new respectable government Italian treasuries keep suffering, one of the main reasons is the relentless dumping of Italian debt. As IFR reports, "European banks are planning to dump more of the €300bn they own in Italian government debt, as they seek to pre-empt a worsening of the region’s debt crisis and avoid crippling writedowns – a move that could scupper the European Central Bank’s efforts to bring down soaring yields. Still reeling from heavy losses on money they lent to Greece, lenders are keen not to make the same mistake twice.Then, under the pressure of governments and a hope that credit default swaps would protect them against heavy losses, they held on until it was too late to sell."
"With the ECB
providing a bid for Italian bonds that might not otherwise exist, board
members at some of Europe’s largest bank say now is the time to
accelerate disposals. Many are also reversing long-standing
policies of buying into new Italian bond issues, denying Rome an
important base of support."