Wednesday, February 26, 2020

EU Warns: Italy's Debt Puts It On the Edge

Risks to Italy's ability to refinance its mountain of debt in the medium to long term are “high,” the EU’s executive arm, the European Commission said in a report.

“The large size of Italy’s public debt makes investors very sensitive to perceived risks,” according to the report.

“The need to roll over sizable amounts of debt, at around 20% of GDP per year, still exposes Italy’s public finances to sudden rises in financial markets’ risk aversion,” the commission said. “High debt-servicing costs also reduce the fiscal space to implement growth-enhancing and countercyclical policies.”

Italy’s debt ratio is close to 140% of GDP, the highest in the euro area after Greece, according to Bloomberg news.


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