During a meeting with Italian prime minister Giuseppe Conte last month, US President Donald Trump purportedly offered Italy assistance in buying the country’s sovereign bonds next year in the face of the country’s distressed financial health, which could have ripple effect implications to the rest of the Eurozone.
Last year, Italy recorded a government debt equal to more than 130% of the country’s gross domestic product, but has struggled to keep its repayments under control. There are no specifics as to how President Trump would implement this bond purchase if the Italian government agreed.
Furthermore, European finance ministers and policymakers have reportedly told CNBC that concerns exist regarding Italy’s spending habits, which could come under more scrutiny once the final budget document is revealed. Italy has an October 15 deadline to complete its 2019 budget plan and submit it to the European Commission.
“I think the Italian government must tell the truth to the Italians, that there is more public expenditure that can make you more popular for a while but then who pays in the end?,” said European Commission Pierre Moscovici.
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