The Italian budget shouldn't face particular risks in the short term, but debt continues to be a huge problem that our country will have to deal with, as well as the bad debts of Italian banking institutions.
These are the considerations on Italy that the European Commission has included in the report on the sustainability of public finances.
“Overall – reads the report – there appears to be no short-term risk of fiscal stress“, but “the share of non-performing loans in the banking sector could represent an important source of short-term liability risks”, adds Brussels.
Speaking of the public debt, according to the EU it should reach 2015% of GDP in 133 and then drop to 130% in 2017. But the expected reduction will not be sufficient given that debt remains the "main source of vulnerability of the Italian economy", given that " limits the country's ability to respond to economic shocks and leaves it exposed to rising interest rates on government bonds, while the ability to increase public investment is limited by the interest account, at 4,3% of GDP in 2015 ”.
As it regards instead bank bad debts, they are considered as a high risk factor in the short term. We remind you that, in these hours, the Rome-Brussels negotiation is underway for the creation of a bad bank into which bad debts can be merged.
The technical meeting between the Minister of Economy, Pier Carlo Padoan, and the EU commissioner, Margrethe Vestager, is scheduled for tomorrow to definitively unblock the Italian plan to relieve bad debts from banks' balance sheets.
