Italy rampant debt hits historical high of €2.772 trillion
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The current monetary policy of the European Central Bank and the continuously increasing interest rates can only show a spiraling-down path for Italy that will inflate state debt and aggravate social inequality.
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Bank of Italy headquarters in Rome, Italy on October 19, 2018 (Reuters)
The Bank of Italy confirmed on Saturday that the country's sovereign debt skyrocketed by 21.6 billion euros in February to hit a historical high of 2.772 trillion euros ($3.075 trillion).
The debt number was described as rampant by the Italian newspaper Corriere della Sera, which added that in 2022, goods and services amounting to 1.909 trillion euros were produced by the country, resulting in a massive 145% ratio between Italy's GDP and debt.
Italy is facing a mammoth deficit this year of 5.6% of GDP, which Italy PM Giorgia Meloni stated in December that she intends to progressively cut down to 4.5% in 2023 and then 3% in 2025. However, funds will result from a higher windfall tax on energy companies and worthy cuts in citizens' income.
As cited by Corriere della Sera, the president of the Italian national consumer union explained that the existing monetary policy of the European Central Bank and the continuously increasing interest rates can only show a spiraling-down path for Italy that will inflate state debt and aggravate social inequality.
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In 2020, Italy's state debt went through a sharp incline as a result of the Covid-19 pandemic - letting the GDP jump to 155%.
After the restrictions were eased, the government reduced support to businesses and citizens and the national economy showed signs of growth. But just last year, the war in Ukraine hit the economy with a hard blow, dropping the GDP and aggravating the state debt again.
The Italian Cabinet announced in September that a package of economic aid to help Italian households and companies was underway, and it will include some $6.2 billion for measures to curb energy prices and solve the crisis.
The European Statistical Office stated back then that annual inflation in Italy is estimated at 8.4%, exceeding a 36-year record that peaked at 8.2%.
Europe still faces a never-seen-before hike in energy prices and inflation caused by the Ukraine war and the European Union's sanctions on Moscow, which are restricting the flow of Russian energy resources into Europe.
