Rome

Italy national debt surpasses two-trillion-euro mark

Record high of 2.014 trillion in October

Italy national debt surpasses two-trillion-euro mark

Rome, December 14 - Italy's public debt crossed the two-trillion-euro mark for the first time in October when it reached a record high of 2.014 trillion, the Bank of Italy said on Friday. The central bank said the national debt had increased by 71.238 billion euros, 3.7%, since January, when it stood at 1.943455 trillion. It added that the debt amounted to 33,081 euros for every person who lives in Italy, babies included, on the basis of Istat estimates that put Italy's population at 60.9 million people. Italy's huge national debt, which is around 126% in relation to gross domestic product (GDP), is the reason the country has been exposed to the eurozone debt crisis. Furthermore, the eurozone crisis has caused Italy's borrowing costs to rise and made it more expensive to service the country's massive national debt. The debt rose despite tax revenues increasing by 2.9% in the first 10 months of this year, compared to the same period in 2011, following austerity measures introduced by the government in order to put Italy on track to balance its budget in structural terms next year. Bank of Italy Governor Ignazio Visco warned last month that the national debt is destined to keep setting records for some time yet, despite Monti's painful austerity measures, which have deepened the recession Italy slumped into last year. "It's arithmetic. As long as there's a budget deficit, the debt will increase," Visco said. "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. There was some good news, as Italy's regional governments and town councils managed to reduce slightly their contribution to the national debt. The central bank said local-government debt amounted to 134.205 billion euros in October, compared to 134.551 billion in September. photo: Ignazio Visco

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