Italy defied the odds and still accessed capital markets for funding despite surging costs which analysts say are unsustainable, especially after the 10 year yield rallied above 7.0% yesterday.

The Italian government sold 5 billion euros of 12-month treasury bills at an average yield of 6.09% rising sharply from 3.57% from October's auction.

With the political instability and the fear in markets the Europe is not ready to contain the crisis or shield Italy the yields have rallied to a record high yesterday, and even as they eased today the 10-year yield is still high at 7.02% according to FactSet Research.