Italians’ Public-Debt Load Up 2,617 Euros Each on Renzi Miss

  • Former premier’s promise to reduce burden was thwarted
  • Debt rose at faster pace than under Berlusconi in 2008-2011

Under Matteo Renzi, Italy’s public debt load rose by 2,617 euros ($2,775) per person, despite his promise to cut the amount for the sake of future generations.

In his first speech as premier to parliament in February 2014, Renzi said the government needed to slash its mountain of bills to pay. Yet, as his chapter closed last month, he had overseen a percentage increase even greater than during the last government led by Silvio Berlusconi from 2008 to 2011.

The country’s public debt is the euro region’s largest in absolute terms and the second-biggest after Greece as a percentage of gross domestic product.

Pier Carlo Padoan, Renzi’s finance minister who has stayed on in the new government, will take part in a panel discussion on Wednesday at the World Economic Forum in Davos, where he is likely to face questions on Italy’s finances.

To be sure, under Renzi and Padoan, Italy emerged from its longest post-war recession, with the economy growing 0.3 percent in the third quarter of 2016.

Renzi also oversaw an increase in public debt per capita of 7.6 percent between his 2014 inaugural speech to parliament and November 2016, his last full month in power.

That is even more than during the 42 months of Berlusconi’s last government, when it rose 7 percent as the euro region’s financial crisis hit the country, forcing the premier to resign in November 2011.

Letta, Monti

The same per-capita ratio rose 0.9 percent in the short-lived government led by Renzi’s predecessor as prime minister, Enrico Letta. It rose 5.5 percent during the technocrat administration of Mario Monti, who succeeded Berlusconi and led the country until April 2013.

Italy’s public debt grew to 2.23 trillion euros in November, according to figures released Friday by statistics agency Istat. The debt was at 2.11 trillion euros at the end of February 2014, the month Renzi took over as premier.

According to the budget law approved last month, the government plans to reduce the debt-to-GDP ratio this year.

Italy’s “low growth has resulted in lingering delays in the reduction of the very high public debt ratio, leaving the country more exposed to adverse shocks,” DBRS Ratings Limited said on Jan. 13 as it downgraded the country’s long-term rating to BBB High.

— With assistance by Chiara Vasarri

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