Economics
Italy Central Bank Urges Caution on Possible Deficit Hike
- Five Star urges looser policy in clash with finance minister
- Salvini, at forum with Bannon, tells Tria ‘don’t worry’
Photographer: Alessia Pierdomenico/Bloomberg
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The governor of the Bank of Italy urged fiscal caution on the nation’s populist government, warning of a negative market reaction and an “unsustainable” risk for the country’s massive debt, as the Five Star Movement pressed for more spending and a wider deficit.
Ignazio Visco, speaking Saturday at a conference in Varenna, on the shores of Lake Como, warned against an unproductive budget-deficit hike given Italy’s existing burden, which trails only Greece in the euro region as a proportion of the economy. A negative market reaction would rapidly worsen the nation’s debt-to-GDP ratio, Visco said.