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Italian Debt Surged the Most Under Berlusconi: Chart of the Day
Oct. 11 (Bloomberg) --
Italy’s public debt surged more than twice as much under Silvio Berlusconi than under his rival premiers since the media tycoon entered politics 17 years ago. The CHART OF THE DAY shows that Berlusconi, who has served as prime minister for about half the time since May 1994, has overseen a 13.5 percent cumulative increase in debt per capita while in office. The debt rose 5.1 percent under four other premiers in the period. Berlusconi said he “inherited” Italy’s debt from previous administrations in remarks on Sept. 13 in Strasbourg, France. The debt burden almost doubled between 1982, when it amounted to 63.1 percent of gross domestic product, to 121.8 percent under Berlusconi’s first government in 1994. It fell to 103.6 percent in 2007, the lowest since 1991, under former Prime Minister Romano Prodi. “Berlusconi hasn’t been helped by the recessions in the years he was in power and by high interest rates, which raised debt-servicing costs,” said Paolo Manasse, an economics professor at the University of Bologna. “Still, with Berlusconi spending has constantly risen, even in the years of economic expansion, and this, combined with choices such as scrapping the property tax in 2008, contributed to higher public debt.” Italy, whose credit rating has been cut by the three main rating companies in the past month, is scrambling to avoid contagion from Europe’s sovereign crisis and reduce debt of about 120 percent of GDP, the second-highest burden in Europe after Greece. The European Central Bank began purchasing Italian bonds on Aug. 8 after the nation’s borrowing costs surged to a euro-era record as Greece moved closer to default.
By Giovanni Salzano and Lorenzo Totaro