Policy Briefs

C. Bastasin: A bipartisan public debt agreement for Italy

The reduction of government debt overhang in Italy remains a key national and European policy priority. In fact, Italy's debt size does not only hamper the country’s economic perspectives. The risk and the uncertainty associated with its size tarnish any endeavor to achieve a more closely integrated European economy. Initiatives aimed at increasing risk-sharing are inhibited. At the same time, the lack of mutualization makes Italy’s debt even more difficult to contain. A composite solution to reduce and share the risk associated with Italy’s public debt needs to be elaborated to break the doom-loop.

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