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Merkel resists push for debt plan; growth plan to total about 1% of regions output.
Initial Spain bailout rally in Italian bonds fizzles on concerns it may succumb next.
Prime Minister risks strikes to ease restrictions on firing employees.
European debt worries now center on Italy and Spain.
EU's largest borrower sees rates rise as its bonds fall for seventh day.
EU's largest borrower sees rates rise as its bonds fall for seventh day.