The data are indisputable. In 2023, compared to 2019, Italy’s public debt-to-GDP ratio is the least developed (+3.1 percentage points of GDP), followed by Germany (+4 points). Spain lags further behind (+9.2 points), while the group of “black sheep” is very large: France (+13.2 points), the United States (+14.1 points), the United Kingdom (+15.4 points), Japan (+16 points), Canada (+16.9 points). Based on the forecasts until 2027, the situation will not change in the coming years, as Italy and Germany are always among the best economies in terms of their ability to keep the growth of the debt-to-GDP ratio under control.
So, Italy is more virtuous in managing public finances than most major developed countries.This was also recently acknowledged by former European Commissioner Pierre Moscovici, now the first president of the French Court of Auditors, who instead criticized his country for the unstoppable growth of its debt.
But if these are the data, how can we deal with the eternal grumbling about our out-of-control public accounts, which characterize, here in Italy, the majority of press commentaries and talk show scripts? Let’s be clear: our debt is too high and we must avoid it, there is no doubt about that. It is also clear that for a few years this will entail the consequences of building up generous super-bonuses. But the Italian public debt, as we have said many times, is not the worst in the world; on the contrary, it is much more sustainable than others, held mostly by Italian rather than foreign investors, and driven primarily by excessive interest spending. compared to the real state of health of our public finances (the notorious proliferation). Moreover, other countries have spent much more than Italy to get out of the pandemic crisis: some have not received a single super-bonuse but 4-5! However, with the exception of the United States, their economies have grown much less than ours.
Recent years have seen strong growth in public debt everywhere, also due to the extraordinary efforts made by various national governments to overcome the pandemic crisis. In Italy, there is a widespread perception that we have spent too much money on building super-bonuses, and that they have had and will continue to have a significant impact on our accounts in the coming years.
In fact, between 2020 and 2025, according to the latest estimates from the European Commission, Italy’s public debt will have the lowest growth in percentage terms among the major Western economies. To be precise, in 2025, our country’s public debt should be 30% higher than in 2019, the year immediately preceding the onset of the coronavirus, versus increases of 32% in Germany, 38% in Spain, 46% in the French, 55% in the British and 64% in the United States. All this, incorporating our debt and the costs of the super bonus, which could certainly have been better planned and undoubtedly cost a lot, but at least generated some growth. Other countries, on closer examination, have spent much more than Italy to get out of the crisis (some of them did not receive a single super bonus but 4-5 super bonuses!). However, with the exception of the United States, their economies are growing much lower than ours.
Moreover, excluding cumulative interest expenses (equivalent to 469 billion euros in six years), the increase in Italian public debt from 2020 to 2025 will be “only” 267 billion compared to 2019 (a figure that also includes the costs of super-bonuses), i.e. only 11%. The net interest increases on the debt of the other major Western countries will eventually be much higher than ours: Spain +21%, Germany +24%, France +31%, the United Kingdom +31%, the United States +35%. Thus, increases two to three times higher than those of Italy, whose debt is increasing, and not from today, above all due to excessive interest compared to the real sustainability of our public accounts.
Moscovici’s concerns
Pierre Moscovici, a veteran French politician, former minister in his country and former European Commissioner, is today the first president of France’s Court of Auditors. In recent days, in an interview with Les Echos, Moscovici sounded the alarm about the French financial situation. For Moscovici, after the debt surge of 2020, “all other countries have reduced their debt, but we (the French, ed.) have not.” In fact, the French case is not isolated. Indeed, among the G7 and Western countries, very few economies have managed to keep public spending under control. To be precise, the only countries that have managed to contain the growth of their debt-to-GDP ratio during and after the pandemic have been Germany, Italy and, to a lesser extent, Spain, as Moscovici himself has admitted.
The data is clear. In 2023, compared to 2019, Italy’s public debt-to-GDP ratio was the least developed (+3.1 percentage points of GDP), followed by Germany (+4 points). Spain was further behind (+9.2 points), while the group of “black sheep” was very large: France (+13.2 points), the United States (+14.1 points), the United Kingdom (+15.4 points), Japan (+16 points), Canada (+16.9 points).
In 2027, the situation will worsen for the United States and the United Kingdom (both +22.6 points compared to 2019), worsen for France (+14.6 points), slightly improve for Japan (+14, 7 points), and improve significantly for Canada and Spain (+8.4 and +6.9 points, respectively). While Italy and Germany will continue to show the smallest increases (+5.4 and +3.4 points, respectively, compared to pre-pandemic levels).
Debt: Complete failure of France, US, UK; Italy and Germany rise.
So, in conclusion, Italy is doing much better than France, Moscovici himself confirms it, he says it all. While here we are beating ourselves up, in press commentaries and on talk shows, in eternal groaning over our out-of-control public accounts. It is clear that our debt is too high and we must avoid it, there is no doubt about it. It is equally clear that this policy will include for several years the consequences of super-construction bonuses. But the Italian public debt, as we have said many times, is not the worst in the world, on the contrary, it is much more sustainable than others, since it is held mostly by Italian investors and not foreign ones, and driven primarily by excessive interest spending. Compared to the real health of our public finances (the notorious proliferation).
If we look at the numbers, the facts, the real growth of debt, there is only one truth. Compared to pre-Covid-19 levels, Italy and Germany are the only “promoters” among the major countries. Instead, the debt of France, the US and the UK is a complete failure, and it is going at a rapid pace. And they show no sign of stopping.
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