Italy has until Tuesday to submit a new draft budget to Brussels, revising the size of its structural deficit, so that it will fall by 0.6 percent of GDP as required by EU rules, rather than rise by 0.8 percent as planned now.

Ten-year Italian bond yields climbed to 3.46 percent , its highest level in over a week, pushing the closely-watched gap over safer German Bund yields back above the key 300 basis points mark.