“Since June when the new Italian government took office, the market has begun to focus again on that country’s shaky public debt fundamentals. The market would seem to be more than justified in doing so. Not only have Italy’s economic growth prospects been diminished by the coming into office of a populist government sorely lacking in commitment to either budget discipline or economic reform. Rather it is also that the country’s present public debt level has not looked more troubling than it has over the past 100 years.

The market’s unease about Italy’s public debt level has been reflected both in a sharp rise in Italian bond yields and a loss in foreign appetite for the country’s public debt. Since the start of the year, Italian 10-year bond yields have approximately doubled to their present level of 3.15 percent, which is the highest level recorded since mid-2014. Over the last two months foreigners have been reducing their Italian government bond holding at a monthly rate of around 40 billion euros.

Sadly, markets would seem to have every reason to be concerned about Italy’s public debt mountain. This is particularly the case at a time that the Federal Reserve has begun to raise interest rates and the European Central Bank has indicated that it intends to end its bond buying program by the end of 2018. According to official data, since the depth of the Eurozone debt crisis in 2012 Italy’s public-debt-to-GDP ratio has continued to rise to its present level of 132 percent of GDP. This makes the country the Eurozone’s second most indebted country after Greece.”

more at https://www.insidesources.com/italys-debt-is-worse-than-you-think/