Italy short-term borrowing costs plummet Italy's short-term borrowing costs have fallen to their lowest in 17 months. The amount of interest Rome had to pay to sell 12.25 billion euros of six-month treasury bills at an auction on Monday was 1.2 percent. Cheap loans from the European Central Bank have made investors keener to lend to eurozone governments over the short-term. The ECB's low interest funds for banks, which started in December, are part of Europe's efforts to end the debt crisis. "It is a very good result," said Matteo Regesta, a strategist at BNP Paribas in London. But Regesta pointed out Italian bonds face a more challenging funding test on Tuesday: "The dynamics for the 10-year sale are different ... (and) results could be less spectacular at the longer end of the curve, but the test could not come at a better time." Italian six-month borrowing costs hit a euro lifetime record high of 6.5 percent in late November - the peak of the eurozone debt crisis - only to halve at an auction held a month later just after the first ECB tender. Italian six-month borrowing costs remain higher than a 0.78 percent yield Spain paid earlier this month on the same maturity. That reflects Rome's much higher funding needs - 1.9 trillion euros - compared with Madrid's. By comparison, on Monday top-rated euro zone borrower Germany paid returns of only 0.08 percent to sell bills maturing in February 2013. More about: ECB, Interest rates, Italian economy