Italian borrowing rates hit record levels on Thursday despite assurances by Prime Minister Silvio Berlusconi at the G20 summit in Cannes that Italy will adopt key reforms by the end of the month. The yield on 10-year government bonds hit 6.402 percent to top the 6.397 percent reached in August when the European Central Bank (ECB) was forced to intervene to prop up the bond market. The ECB was active again on bond markets on Thursday, traders said. The rate fell back to 6.319 percent later but remained well above the six-percent threshold that analysts say could cause problems for Italy\'s ability to raise money on commercial debt markets within months. The spread, or difference, between the yields on Italian and benchmark German 10-year bonds also hit a record 462 points, before going down below 450 points in a highly volatile session on financial markets. An emergency cabinet meeting on Wednesday adopted reforms including state asset sales, tax incentives for recruiting workers, measures to boost market competition and the unblocking of billions in aid for southern Italy. The measures, which still have to go before parliament for final approval, stopped short of major changes such as higher taxes for the wealthy, a one-off levy on current accounts and a housing tax that had been mooted in recent days. At the G20 summit, Berlusconi said the measures would go before parliament next week and be approved by the end of the month. He vowed to stick to Italy\'s target of balancing the budget by 2013 with major austerity measures. Italian stocks plunged 2.42 percent at the start of trading on Thursday but later rallied and closed up 3.23 percent, helped by a surprise European Central Bank interest rate cut. \"To Cannes with almost empty hands,\" read the headline of an editorial in business daily Il Sole 24 Ore, saying: \"The prime minister is landing in Cannes today armed more with words than with convincing numbers.\" \"We therefore face terrifying days on the markets,\" it added. Fabio Fois, an economist at investment bank Barclays Capital, said: \"The market is waiting for the most urgent measures like labour market reform.\" That reform, which would make it easier to fire workers on long-term contracts, has been mentioned but has infuriated Italy\'s trade unions. Italy\'s leading companies and eurozone leaders France and Germany have urged Berlusconi to move quickly on long-promised structural reforms to cut debt and boost growth but the government has been snared by infighting. \"The government is seen as having lost its ability to act,\" Fois said. Italian stocks on Tuesday plunged 6.8 percent in their worst session since the start of the global financial crisis in October 2008, fanning fears that Italy could be dragged into a debt spiral like Greece, Ireland and Portugal. Berlusconi\'s popularity ratings meanwhile have hit a record low of 22 percent, according to the latest poll released on Wednesday, and the centre-left opposition has called on the prime minister to resign. There have been growing calls from the opposition for a national unity government to pass unpopular reforms but Berlusconi\'s key ally, the Northern League party, has said it would prefer early elections. \"Everyone except the person concerned has understood that the problem is not the medicine, which may be bitter, but the doctor,\" said speaker of parliament Gianfranco Fini, who defected from Berlusconi\'s coalition last year.