A lack of confidence that the Italian government will carry out fiscal reform and sell key state assets is weighing on Italian bonds, due to the conditionality attached to any potential European Union bailout plan, according to a report.

Mario Draghi, the president of the European Central Bank, earlier this month set out a bailout mechanism where struggling eurozone countries would only be able to access funding after signing a memorandum of understanding on measures to restore the health of their public finances.