Rome

Italy's public debt set for many more records, says Visco

Budget deficit means 'it's arithmetic' says central bank chief

Italy's public debt set for many more records, says Visco

Rome, November 14 - Italy's huge national debt is destined to keep setting records for some time yet after reaching a new high of almost two trillion euros in September, Bank of Italy Governor Ignazio Visco said on Wednesday. The central bank said Tuesday that the public debt climbed to 1.9951 trillion euros in September, 19.5 billion euros higher than in August. This occurred despite tax revenues increasing by 280 billion euros in the first nine months of this year, a 2.6% increase on the same period in 2011, following tax increases introduced by the government in order to put Italy on track to balance its budget in structural terms next year. "Yesterday we had a new record for the debt," Visco told a Senate session. "It's arithmetic. As long as there's a budget deficit, the debt will increase. There's nothing than can be done. "We'll have many more records in front of us until we balance the budget, not just in structural terms, but also in absolute terms". A country is considered to have balanced its budget in structural terms if government revenues match expenditure when the data is adjusted to take account of the business cycle. Italy's national debt, which is around 126% in relation to gross domestic product, was what took it to the centre of the eurozone crisis before Premier Mario Monti's emergency government passed austerity measures to put the nation's public finances in order.

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