Italian bond yields rose to record high earlier on Tuesday on fears spreading in markets that Italy may default on its debt obligations ahead of a crucial budget vote later in the day as Prime Minister Silvio Berlusconi has to make sure that he still has majority that guarantees the implementation of the announced austerity measures to cut the country's huge budget shortfall.

The yield on the 10-year notes climbed to 6.67% at 09:01 London time after reaching a high of 6.74%.