Italy PM Letta says borrowing costs threatened by instability ROME (Reuters) - Prime Minister Enrico Letta warned on Wednesday that Italy could face higher borrowing costs if continued political instability undermined the progress it had made in reassuring financial markets over the state of its public finances. "We can ruin this in a moment," he told parliament in a report on the recent meeting of the G20 economic powers in St Petersburg. Letta was referring to the market nerves which have taken Italy's borrowing costs above those of Spain for the first time in 18 months. I say it particularly today on a day when our interest rates, instead of continuing to go down as they have done over the past few months are continuing to suffer, because of political instability. Reporting By James Mackenzie