O'Neill: Italy needs 4% borrowing costs to sustain itself

Italy's will struggle to finance itself until borrowing costs fall back towards the 4% level, according to Goldman Sachs Asset Management chairman Jim O'Neill.

Italian benchmark 10-year yields have fallen back towards the 6.5% mark, having previously moved as high as 7.5%, after the ECB bought bonds in the market and launched a three-year long-term refinancing operation. But O'Neill, speaking to Bloomberg Television, said Italy has a lot further to go until its borrowing is back on a sustainable path. "What is important about the European mess is Italy. Ultimately a government's borrowing rate to be sustainable has to be pretty close to its growth rate and inflation rate put together. That would imply anything above 4% ultimately is a bit di...