Italy would never willingly choose to leave the single currency and would drop out only if it were forced to, Italian European Affairs Minister Paolo Savona said on Saturday in a televised speech. The sustainability of Italy’s 2.3 trillion euro ($2.7 billion) debt, one of the world’s largest, has resurfaced as a potential problem since a populist government rose to power in May on promises of higher spending. Debt rating agency Moody’s on Friday cut Italy’s sovereign debt rating to one notch above junk status because of concerns over government budget plans. But Moody’s also said the outlook for Italy’s rating was now stable.
“Italy’s debt is perfectly solvent, there is no question that Italy may default on its debt,” Savona, a eurosceptic economist, told a business conference in Capri.
“There is no chance, as far as Italy and my government are concerned, that Italy’s public debt runs a so-called redenomination risk, that it may reject the euro. If this event happens, it will be for reasons outside of the country’s will.”
Savona’s appointment as finance minister in the current government was vetoed by Italy’s President Sergio Mattarella who said it risked propelling the country out of the euro.