DZ Bank warns of a “vicious circle” in Italy

Frankfurt The Italian government threatens to lose control of the national debt. This is the result of a study by DZ Bank. The calculations by analyst Sophia Oertmann are available to the Handelsblatt.

Oertmann warns of a “vicious circle of rising refinancing costs and dwindling debt sustainability” that is to be feared from a certain “tipping point”. The issue has an impact on the euro government bond market far beyond Italy, possibly even on the cohesion of the euro zone. Because doubts about the solvency of a large euro country would deter investors from the region as a whole.

In an earlier study, DZ Bank confirmed to the right-wing Prime Minister Giorgia Meloni, who has been in office since October, that she was not taking a confrontational course with Europe, as many had feared. However, DZ Bank complains that Meloni has not initiated any reforms to restructure Italy’s national budget.