Italy's Debt Challenge: Mattarella's Urgent Call For Action

Italy's President Sergio Mattarella emphasized the urgent need to reduce the country's massive public debt, addressing its high cost of servicing compared to European neighbors. Speaking at the Teha economic forum, he noted Italy's 30-year history of primary government surpluses. Italy's public debt, the second-largest in the eurozone, is projected to reach nearly 140% of GDP by 2026.

Italy's president underscored the "inescapable need" to curb the nation's substantial public debt while questioning market perceptions of financial reliability. Speaking at the Teha economic forum, President Sergio Mattarella highlighted the higher costs Italy faces servicing its debt compared to neighbors due to interest rates.

Mattarella pointed out Italy's commendable 30-year history of primary government surpluses and explained that the significant public debt growth since 1992 is primarily due to interest. He stressed that Italy's debt, the second largest in the eurozone as a proportion of output, is closely monitored by rating agencies and expected to rise to nearly 140% of GDP by 2026.

At the forum, Mattarella revealed that Italy's debt is nearly 2.9 trillion euros ($3.22 trillion) in 2023, with interest payments marginally less than those of Germany and France combined. He affirmed the importance of reducing this debt while acknowledging the need for vigilance. Italy is mandated to present budgetary plans to the European Commission to lower its deficit and debt levels, with a goal to reduce the structural budget deficit annually by 0.5% or 0.6% of GDP. Prime Minister Giorgia Meloni's government aims to bring Italy's deficit-to-GDP ratio below the EU's 3% ceiling by 2026.

(With inputs from agencies.)