What is needed to stabilize Rome’s debt/GDP ratio? With the country’s bond yields above 7 pct, Reuters Breakingviews has published a timely calculator on Italy's debt spiral
. This calculator shows what level of primary surplus is needed to keep Italy’s debt to GDP level stable. It uses Italian government forecast for the growth rate and current bond yields, but you can use your own inputs.
What’s the bottom line? If Italian bond yields stay at 7.5%, Rome would need a 6% primary surplus just to keep its debt /GDP ratio static — and that's assuming it meets its growth forecasts.
Check out the Reuters Breakingviews calculator