Italian long term bond sales - Underwhelming

FT.com has the story

The Treasury in Rome sold €2.5bn of bonds due in 2014 at a yield of 5.62 per cent on Thursday, down from 7.89 per cent at the previous sale on November 29, and priced €2.5bn of 2022 bonds to yield 6.98 per cent, compared with 7.56 per cent on November 29. Italy also sold €2bn worth of bonds due in 2021 and a floating-rate security due in 2018.

However, the auction of both the 2014 and 2021 maturity notes fell short of the Treasury’s target, clouding what would otherwise have been a relatively successful follow-up to the six-month bill auction.

Let met get this straight
   - They sold 10 yr bonds at 6.98% instead of 7.56%.  Yay!  Victory!  Eurocrisis resolved!  Thats sarcasm, in case you didnt figure it out
   - They didnt sell as many as they were expecting.  Thats not good by any stretch of the imagination

The second point is particularly bad, since the ECB LTRO stuff basically had the same maturity, and sold like hotcakes.

And the first point is *horrific*, since all Italy has to do is grow at 5% to maintain their primary surplus.  And the trend on that is not positive at all (hint, its at ~1%, and falling)