Financial markets are concerned about the risk of a public debt crisis in Italy. But the risk of a public debt crisis in Italy may not be so high, in the view of analysts at Natixis.

Is there a real risk of a public debt crisis in Italy?

“The risk of an Italian public debt crisis may seem high, given the high level of debt, the new government’s expansionary fiscal policy, high interest rates and the lack of potential growth.”

“But the risk of a debt crisis in Italy must be put into perspective, as: Italy has no external deficit, unlike at the time of the euro-zone crisis, which rules out a balance of payments crisis; Yields on Italian bonds makes them attractive for investors; The ECB controls the yield spreads between eurozone countries.”