European Debt Crisis

Italian government indicates willingness to amend budget

Investors are welcoming with relief the Italian government's indication that it is open to changing the draft budget that has led to a high-stakes standoff with the European Union.

Bond yields dropped significantly Tuesday, a sign of greater investor confidence, after Italy's populist leaders said their focus in the budget is "on relaunching growth and development" and that they were not bothered by "a question of decimals" in the level of the deficit.

Their comment late Monday showed a willingness to respond to the EU executive Commission's concerns about a spending plan that would increasing Italy's debt to 2.4 percent of GDP, three times the level...