Italy’s government has made its country deeply in debt. In fact, Italy’s public debt failed to comply with the EU requirement for the public debt to GDP ratio before the corona crisis. However, due to the pandemic, Italy’s fragile economy is crippled with the apocalyptic national debt.
According to the National Institute of Statistics (Istat), the country’s public debt swelled to 155.6% of GDP to €2.569 trillion. Back in 2019, the national debt stood up at 134.6% of GDP, but the coronavirus forced the authorities to resort to more borrowings. The debt burden is worsened by a sharp contraction in the national economic output. Italy is acknowledged as being the hardest stricken by COVID-19 that played havoc with its economy. Istat reported that Italy’s gross domestic product plummeted 8.9% last year in annual terms to €1.651 trillion.
Italy is not the only country in the EU which is running up huge public debt. Spain has to deal with the heaviest debt burden for 100 years. In 2020, Spain’s national debt ballooned to €1.311 trillion to make up 117.1% of its GDP, the worst one-year figure since 1902. All in all, rising public debts are hanging over all EU countries like the sword of Damocles. Apart from the debt problems, the UK shocked market participants and analysts with the steepest fall in the economic output for 300 years. In 2020, the UK GDP logged the worst contraction since 1709.
