Italy has a $127 billion debt problem it can't easily resolve

By Giulia Morpurgo

28 Nov 2022 · 4 min read

Editor's Note

Italian businesses received billions in state-backed loans during the pandemic, and are struggling to repay it. Italy’s state is also heavily indebted. As Bloomberg reports, it’s a bad combination.

While much of Europe Inc. is shrinking state-backed loans from the pandemic, Italian companies are still sitting on mountains of such borrowings, complicating government efforts to help them surmount the latest crisis: soaring energy costs.

Italian companies had a record €123.2 billion ($127 billion) of Covid-era state-backed credit lines outstanding as of June 30, up from €118 billion in the previous quarter, according to a European Banking Authority report published last month. The country has the most government-guaranteed debt yet to be repaid in the euro zone, even though it's not the region's largest economy.

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