Italian public debt hits record EUR 1.573 trillion

In April the debt stood at 1.566 trillion euros, the central bank added.

Italian public finances are in dire straits, with a public deficit equal to 4.1 percent of gross domestic product and debt at 106.4 percent of GDP.

In early July, the new center-left government of Romano Prodi drafted a budget reduction plan aimed at bringing the deficit below 3.0 percent of output by 2007, thus meeting its obligations under the European Union Stability and Growth Pact.

Debt should be no higher than 60 percent of gross domestic product (GDP) under the pact's rules.

On July 7, Italian Finance and Economy Minister Tommaso Padoa-Schioppa said the deficit would measure 4.0 percent of GDP this year before falling to 2.8 percent in 2007 and 2.2 percent in 2008.

Padoa-Schioppa also said Italy's public debt would be brought below 100 percent of GDP in five years.