Italian public debt hits new record high

The country's debt swelled to €1,609.12 billion ($2,218.67 billion), according to Italian News Agency ANSA. The report came in the wake of calls from the European Union that more be done to straighten Italy's public accounts.
The Italian government sees Italy's debt mountain falling to 105.1% of GDP this year compared to 106.8% last year and dropping below 100% by 2010. The forecasts are contained in the center-left administration's draft DPEF, a key four-year economic and budget planning document. The DPEF forecasts a budget deficit of 2.5% this year, down from 4.4% in 2006.

The 2006 deficit was the highest in 10 years and meant that Italy had breached the European Union's 3% deficit cap for four years running. But the European Union has expressed concern over the DPEF, urging Italy to increase its efforts to consolidate public finances.

The International Monetary Fund has also criticized the DPEF as being “not in line” with its recommendations and failing to provide “what Italy needs.” It called for more money to be spent on cutting the deficit. The Bank of Italy noted in its Thursday report that tax revenues were up 5% or €6.4 billion ($8.8 billion) in the first five months of the year compared to the same period in 2006. (people.com.cn)