Consolidation signals: deficit down, primary surplus and record-low spreads
An improving picture
Italy’s deficit dropped to 3.4% of GDP in 2024, nearly halved from 7.2% in 2023. At the same time, the primary surplus returned to positive territory (+0.4%), showing the State can cover current expenditure excluding debt interest. Public debt, though high, stabilized at 135.3% of GDP.
EU Commission forecasts
The European Commission projects further deficit reduction: 3.3% in 2025 and 2.9% in 2026, values that bring Italy back within the Maastricht Treaty thresholds, opening the way for the closure of the excessive deficit procedure by 2026.
Fiscal discipline required
The EU Council set strict conditions: net expenditure may increase only by 1.3% in 2025 and 1.6% in 2026. This forces the government to ensure fiscal discipline and careful resource allocation.
Markets and spread supportive
The BTp-Bund spread has remained below 100 basis points, reaching 90 in June 2025—the lowest since 2010. Ten-year bond yields hover around 3.6%, well below the 2023 peaks above 5%. This generates savings on interest payments estimated at up to €13 billion in 2025–2026.
A political and economic test
According to Unimpresa president Paolo Longobardi, Italy must consolidate results while preserving social cohesion and investments. Any deviation could reignite market distrust, while fiscal discipline would strengthen Italy’s role in Europe.
Challenges and outlook
Italy still faces high debt and weak growth (0.5% in 2025, 0.8% in 2026). Yet the combination of improving fiscal parameters and favorable markets brings the country closer to full European fiscal normality.