Italian borrowing rates hit record high levels on Thursday despite urgent efforts by Prime Minister Silvio Berlusconi to steady markets with what analysts said were meagre measures to stimulate the economy. The yield on 10-year government bonds reached a peak of 6.402 percent -- higher than the level of 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 lowered slight to 6.319 percent later on Thursday but remained 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 10-year bonds and benchmark German ones also hit a new record of 462 points, before going down below 450 points in a highly volatile session on financial markets. The Bank of Italy had sought to allay fears on Wednesday announcing the results of a \"stress test\" that it said showed Italy could still reduce its huge public debt even if the bond rate went as high as 8.0 percent. An emergency cabinet meeting later on Wednesday adopted reforms including selling state assets, 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 a tax on large capitals, a one-off levy on current accounts and a housing tax that had been mooted in recent days. Italian stocks plunged 2.42 percent at the start of trading on Wednesday but later rallied and were up 1.40 percent in afternoon trading. Industrial shares led the rally with aerospace and defence giant Finmeccanica rising 4.48 percent to 4.668 euros a share. Wednesday\'s meeting left Prime Minister Silvio Berlusconi, whose popularity ratings are at record lows, with little to show off at the G20 summit in Cannes despite assurances that Italy would proceed rapidly with reforms. \"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.\" It said: \"We therefore face terrifying days on the markets.\" Financial news website firstonline.info said the cabinet meeting had \"served more to highlight differences between ministers... than to adopt anti-crisis measures\" and warned of \"a growing sense of unease in the majority.\" Fabio Fois, an economist at investment bank Barclays Capital, said: \"The market is waiting for the most urgent measures like labour market reform. The 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 mired by recent 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 through 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.