European markets rise, Italian bond spread stable

European markets rose after reports of significant progress on financial talks leaked through Greek press on Monday. The Greek government and the troika - representatives of the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) - reached essential terms of agreement on a 13.5 billion-euro deal, which laid out refinancing in exchange for deep reforms and more austerity, under the looming deadline of the European leaders' summit on Thursday, reported Greek newspaper Kathimerini. Paris's CAC 40 index gained 0.92%. Madrid's Ibex 35 index rose 0.34%. Frankfurt's DAX index closed up 0.4%. Milan's FTSE MIB climbed 0.50% to close at 15,590 points on a day that also saw rosier economic reports from Italy's government. Italy's gross domestic product should bounce back up as high as 2.5% in 2013 from current recessionary levels, Industry Minister Corrado Passera said Monday, giving credit to reforms passed by Premier Mario Monti's government, the effects of which Passera said would kick in next year. Italian public debt fell to 1,975,631 billion euros in August from 1,977,494 in July, the Bank of Italy reported on Monday. Tax revenue was up 2.8%, to 257,121 billion euros, in the first eight months of the year compared to the same period in2011, added the Italian central bank. The spread between interest rates on Italian and German bonds - a barometer of Italy's borrowing costs - closed nearly stable at 350 points, after oscillating as low as 345 points on Monday. On Friday, it had closed at 353 points. The yield on Italian 10-year bonds slipped below 5% to close at 4.98%, though it had dipped to 4.95% during the day. The spread between Spanish bonds and the German benchmark on Monday closed at 434 basis points. The yield on Spanish bonds was 5.81%.