MILAN— Giuliano Melani, a businessman from a small town in Tuscany, bought a full-page ad in Italy's largest newspaper this month, urging his compatriots to seize control of the country's spiraling debt crisis by buying up Italian treasury bills.

Giuliano Melani, an Italian businessman who took out an ad in Italy's largest newspaper urging his compatriots to buy government debt, spoke at a rally Monday in Bologna. Deborah Ball/The Wall Street Journal

"Let's make an effort. Let's buy back our debt," said the ad in Corriere della Sera. "I assure you it's worth it. Holy God, we are one people, a great people."

The national attention given to Mr. Melani's foray struck a nerve among Italians irritated at the notion that their country is at the mercy of leaders in France and Germany or, worse still, of foreign speculators. The result is a quixotic campaign to prod Italians into buying enough of the country's €1.9 trillion ($2.5 trillion) in debt to regain control over Italy's fate.

An unintended consequence of fiscal union in Europe will be increased yields in Germany and France in years to come, Vince Cignarella reports on Markets Hub. Photo: Reuters.

Mr. Melani's campaign helped prod Italian banks into participating in an event on Monday in which, for a day, they scrapped their commissions on the secondary-market sale of Italian government bonds, known as BTPs. (Banks will waive their fees once again on Dec. 12.) Mr. Melani celebrated BTP Day, as it was dubbed, by gathering about 75 supporters in a basketball arena in Bologna, where he read some of the 2,000 bullish emails he has received from supporters.

An auction of government bonds on Tuesday, however, showed that, despite the patriotic uprising, Italy still faces enormous pressures. Though demand was strong, Italy had to pay 7.89% on three-year bonds and 7.56% on 10-year bonds, marking new highs for the country since the birth of the euro. Yields over 7% are considered unsustainable for a country with such huge debt, say analysts, and reflect the intense pressure on euro-zone leaders to find a solution to the debt crisis quickly.

Italians have long been enthusiastic buyers of government paper, particularly in the 1980s, when yields soared to nearly 20%. Today, Italians hold about half of Italy's outstanding public debt, which in turn makes up about 20% of their household wealth.

That compares with 1.6% for the French.

In recent weeks, with yields topping 7%, Italians have snapped up even more government paper.

But the risks attached to buying Italian government paper have soared in recent months. A failure to find a political solution to the euro-zone crisis could lead to an unraveling of the euro and a possible default by Italy, although many analysts expect a resolution. The more immediate risk is for Italian retail investors who need to sell their bond holdings before they mature. While most Italian households typically hold government paper to maturity, they could suffer hefty losses if bond prices continue to fall, as they have in recent months.

Some critics have denounced BTP Day as a ruse that deflects attention from the failure of politicians to get a grip on Italy's fiscal woes and that could imperil Italians' savings if the crisis worsens.

"Don't fall for this story of patriotism," said Oscar Giannino, an editorialist and a member of a conservative think tank, in a radio address last week. "If you need to sell your BTPs later because you need the money, you'll take a huge loss."

After Mr. Melani's ad appeared, a group of students in Bologna took up a collection to buy T-bills, raising €3,000 so far. Politicians have publicly brandished recent purchases. Mr. Melani, a leasing agent who said he was inspired to buy the ad after clients canceled orders because of the recent crisis, bought €20,000 and promises to buy an additional €30,000 of government bonds.

"I thought, 'Enough,' " he said. "If we don't do something, we'll end up like the Greeks."

Similar sentiments were on display at Mr. Melani's party on Monday. In the background, rousing music such as the "Chariots of Fire" theme song played.

"If each of us bought a piece of the debt, we could stop taking sucker punches from our European partners," wrote one fan in an email that was read out. Many others said the ad inspired them to buy €10,000 or €15,000 of government bonds; one pensioner sank his entire €65,000 of severance funds into BTPs.

"It's the right thing to do," says Antonella Nonino, one of the owners of a prominent Italian grappa brand, who bought BTPs in recent weeks. Even the association of Italian football players said it bought bonds on Monday. "Some of us play for the national team," the group said in a statement. "But we all root for this country."

Banks, which posted banners publicizing the day on their websites and on ATMs, said volumes of BTPs purchases were about double the normal rate on Monday, many in lots of €10,000 to €20,000 that suggested strong demand by retail investors. Even as banks encourage clients to buy government paper, however, they are themselves under heavy pressure to lighten their own large holdings.

One BTP Day bystander was former Premier Silvio Berlusconi. "I didn't buy anything, I have been here all day," he told journalists in a Milan courthouse, where he is a defendant in a bribery trial. Mr. Berlusconi denies the charges.

Write to Deborah Ball at and Sabrina Cohen at