Italian public debt balloons

Italian public debt has risen upwards of 2.2 trillion euros in May, new data showed Tuesday - a new record for the southern European country that is the eurozone's second-most indebted after Greece.

The new numbers from the Central Bank of Italy come at a time when the Greek debt crisis is dominating headlines and observers view ballooning public debt within the currency union with worry.

Italy’s debt is now at 132 percent of GDP, compared to Greece’s 175 percent. Both countries find themselves far from the 60 percent debt-to-GDP ratio target set by the European Commission.

The consequences of an Italian debt crisis would however be more dire - it’s the third largest economy in the eurozone.

Reforms put Italy on 'growth path'

Finance Minister Pier Carlo Padoan has been criticized by opposition politicians for not being able to bring down sovereign debt, which was already at 120 percent five years ago.

However, Padoan told Italian daily il Sole 24 in an interview that structural reforms mean Italy is on a “path to growth."

Like Greece and other Southern European countries, such as France, Italy struggles with structural issues in its economy, including an inflexible labor market, high welfare benefits and a bloated public sector.

jd/cjc (Central Bank of Italy, AP)