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Italy held talks with China's sovereign wealth fund amid reports it asked it to buy its bonds
ROME (AP) ' Italy confirmed reports Tuesday that the treasury minister has met with China's sovereign wealth fund amid speculation that Rome is looking to persuade Beijing to buy its bonds or invest in its companies.
The news sent the Milan stock market higher on the open, following market tensions across Europe on Monday. But the rebound was short-lived, and by mid-morning, stocks across Europe, including Milan, were down. Bond prices likewise received little support from the news.
A spokesman for Finance Minister Giulio Tremonti confirmed the meeting with the chairman of China Investment Corp., Lou Jiwei, but declined further comment.
The Wall Street Journal and the Financial Times said the meeting took place last week in Rome, without citing sources. Reports said the meeting also included officials of China's foreign currency regulator and the Cassa Depositi e Prestiti, an Italian government investment vehicle.
The European Central Bank has bought Italian bonds in the open market to keep their yields ' a indication of the rates at which the country would be able to borrow ' down. In return, the Italian government has pushed austerity measures that seek to slash spending by more than euro54 billion ($70 billion) over three years. Lawmakers are expected to pass the measures this week.
Later Tuesday, Italy holds an auction to sell up to euro7 billion ($9.5 billion) of bonds.