Italy has paid record high interest rates to borrow money for five years at a bond auction this morning. The yield, or rate demanded by investors, soared to 6.47% as Italy raised €3 billion from the auction. It was the first sale of longer-term debt following the EU proposals to move towards greater fiscal integration at last week's summit. The average yield compared with the 6.29% Italy paid a month ago, which was also a euro lifetime record high. Italy has trimmed the size of its bond auctions in reaction to market pressure, but it will have to step up a gear in the coming months if it is to meet a gross funding goal of around €440 billion next year. Meanwhile, Germany has sold €4.18 billion of two-year treasury notes in its last such auction this year. The Bundesbank said demand for the debt was strong. The German central bank said it received bids totalling almost €6 billion for the €5 billion worth of two-year "Schatz" bonds on offer, with the Bundesbank itself retaining €820m for market-tending purposes. The average yield or return on the bonds stood at 0.29%, lower than the 0.39% paid at the previous auction last month.