Italy’s finance minister has tried to stem growing concern over Italy’s budget plans as the country’s borrowing costs touched new four-year highs despite assurances that Rome wanted to calm tensions with investors and with the EU, the Financial Times reported. Speaking to Italian lawmakers, Giovanni Tria said the populist coalition would not deviate from plans to widen the country’s deficit to sharply increase spending.

The spread between the cost of Italian and Spanish debt is at its highest level for more than 20 years, in a sign that investors remain unconcerned about the future of the eurozone despite Italy’s spiralling bond yields, the Financial Times reported. Italy’s 10-year yield hit 3.71 per cent on Tuesday, its highest level since February 2014, after the country’s finance minister Giovanni Tria failed to alleviate growing investor jitters over its fiscal position. Short-dated bond yields also rose, although they remain below the highs they hit earlier this year.

German carmaker Opel, owned by France’s PSA Group, said on Tuesday it would stop selling the Cascada convertible, the Adam city car and the KARL at the end of 2019, as part of a product overhaul to focus on sport-utility vehicles. The maker Opel and British Vauxhall branded cars blamed new emissions rules for the cull, but the carmaker has struggled to reach sustainable profitability after racking up more than a decade of losses selling low-margin cars under previous owner General Motors, Reuters reported.

A sharp fall in imports pushed Germany’s trade surplus sharply higher in August, according to new data released on Tuesday that underscore the summer slowdown in parts of the global manufacturing sector, the Financial Times reported. The trade balance reached €18.3bn in August on seasonal and calendar adjusted terms, according to the Federal Statistics Office. The jolt higher represented a bounceback from a steep fall during the previous month. Imports dropped 2.7 per cent in August from July to €92bn, while exports slipped 0.1 per cent to €110.3bn.

History does not repeat itself, but it does rhyme. Jim Leaviss of Bond Vigilantes has dug out his missives in the months before Lehman Brothers imploded in 2008, and found some ominous similarities, the Financial Times reported in a commentary. The market was obsessing about oil prices, then on their way to $140 a barrel, while the European Central Bank was tightening monetary policy. All that is needed for a hat-trick today, says Mr Leaviss, is a “credit accident”, and for good measure, he notes that the biggest difference between then and now is the level of debt.

Brussels has written to Italy’s populist government warning of “serious” concerns that the country’s draft budget plan will break eurozone spending rules — a development that is likely to fuel fears of a full-blown showdown between Rome and the EU later this month, the Financial Times reported. In a letter to Giovanni Tria, Italy’s finance minister, the EU’s two commissioners in charge of budgetary rules urged Rome to take heed of rules requiring Italy to shrink its budget deficit next year.

Italy is working on an Alitalia rescue plan that would see the state taking a stake of around 15 percent in the carrier along with separate investments by state-owned firms such as Ferrovie dello Stato and a foreign player, Il Sole 24 Ore said on Sunday. Once a symbol of Italy’s post-war economic boom that has recently struggled to compete with low-cost carriers and high speed trains, Alitalia was put under special administration last year after workers rejected a rescue plan, Reuters reported.

A rebound in German industrial orders has yet to feed through to production, with output from the country’s factory sector once again lagging behind expectations, the Financial Times reported. Industrial production dropped 0.3 per cent in August from the previous month according to statistics agency Destatis, after a 1.3 per cent month-on-month decline in July. Economists polled by Reuters had expected a 0.4 per cent increase for August. July’s production was also worse than previously thought. Data had originally pointed to a decline of 1.1 per cent for the month.

Senior European Union officials believe Italy risks facing a massive debt restructuring task - and one that would hit its own citizens hardest - unless it backs down in its unprecedented challenge to Brussels' budget rules. Italy's 2.3 trillion euro national debt dwarfs that of Greece and the euro zone bailout fund would not be able to cope with the costs of supporting its government in a crisis, the International New York Times reported on a Reuters story. Any such crisis could threaten the euro itself, seen by many as the EU's greatest achievement.

Just as Iceland looks back at a decade of recovery since its financial and economic collapse, the north Atlantic island is once again grappling with an existential challenge for one of its key industries, Bloomberg News reported. Tourism and the foreign cash it provides was instrumental in digging the 340,000-person nation out of its deep hole. Now, the industry is cooling fast and problems are mounting for its airlines after years of rapid expansion. Rewind to 10 years ago, and a similar tale could be told about the nation’s banks.