Italian government debt ‘reason for concern’: EU

The European Commission sounded the alarm on Wednesday over Italy's high level of public debt, adding to concerns about the eurozone's third largest economy.

Italian government debt 'reason for concern': EU
Photo: Philippe Huguen/AFP

“In the case of Italy, the persisting high government debt is a reason of concern,” the European Commission said in a statement on Wednesday.

Debt levels are a concern in the EU, which has only recently started to make a sustained recovery from the 2008 global financial crash and the ensuing eurozone debt crisis.

Brussels singled out six eurozone nations – Italy, France, Belgium, Austria, Portugal and Slovenia – as being on course for breaching EU regulations on government deficits.

Italy found itself in the EU's crosshairs on Wednesday, with Valdis Dombrovskis, the commission vice president responsible for the euro, and EU economic affairs commissioner Pierre Moscovici writing a letter to the government in Rome setting out their “concern”.

“Italy's public debt remains a key vulnerability,” they wrote to Italian finance minister Pier Carlo Padoan.

“Given the size of the Italian economy, it is a source of common concern for the euro area as a whole.”

Italy, the eurozone's third largest economy after Germany and France, is predicted to have one of the lowest rates of growth in the whole EU over the coming three years.

Brussels will give Rome until spring 2018 to bring things back in order, the commission said.