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Italy's public debt surged by nearly €5 billion ($5.6 billion) in the first five months of the year, hitting a new record in May, data published by the Bank of Italy this week revealed.
Government debt reached €2.816 trillion ($3.1 trillion) in May after passing the €2.800-trillion mark in April, figures showed. It represents a €4.8 billion ($5.3 billion) increase compared to the previous month, the regulator said.
Massimiliano Dona, President of the National Union of Italian Consumers (UNC), said:
"Another historic record! This is a big disaster for our country, given the constant rise in interest rates, leading to an increase in the burden of public debt, which the Italians pay from their taxes. It is impossible to cut taxes while the public debt is out of control. We have to change its structure by helping low-income households and by raising windfall taxes."Italy is the most indebted country in the Eurozone after Greece, and one of the most highly indebted nations in the world.
The level of state borrowing is the equivalent of €47,862 ($53,729) per citizen, or about €107,500 ($120,667) per family, according to the head of UNC.
Italy's ratio of debt to gross domestic product (GDP) reached an all-time high of around 155% during the peak of the Covid-19 pandemic in 2020. The Italian economy has somewhat recovered since then, but ratio was still one of the highest in the EU, at 144% in the last quarter of 2022, according to Eurostat.
You know, 144% ratio of debt to GDP sounds bad and this article makes Italy sound a bit like an outlier, but seven months ago the U.S. debt to GDP ratio was about 130% - and it continues to rise [Link] as the GDP stumbles (it was -0.1% last quarter) [Link]
You remember what happened to Greece when the World Bank decided to collect on its loans? In 2009 Greece had a debt to GDP ratio of 144% and could not service the interest payments. In 2011 the country was forced to take financial haircuts [Link] [Link] even though the ratio had fallen below 120%.
So the U.S. owes more than 31 trillion dollars (to someone) and interest payments ALONE on that debt is now 1 trillion dollars per year. And rising.
When will the U.S. become Greece and default on its loan payments? How many more fiat dollars printed before the lenders (U.S. bond holders) decide to take real assets rather than promises in repayment ?