Finance
Italy says ECB should cut rates more to address euro zone stagnation
Published by Global Banking and Finance Review
Posted on October 3, 2025
2 min readLast updated: January 21, 2026
Quick Summary
Italy's Economy Minister urges the ECB to cut interest rates to address euro zone stagnation, highlighting rising public debt interest costs.
Italy Urges ECB to Further Lower Rates Amid Euro Zone Stagnation
ROME (Reuters) -The European Central Bank (ECB) should resume cutting interest rates to revive a near-stagnant euro zone economy, Italian Economy Minister Giancarlo Giorgetti said in the government's multi-year budget plan.
The ECB left its key deposit rate unchanged at 2.0% last month as expected, and maintained an upbeat view on growth and inflation, dampening expectations for any further cut in borrowing costs.
"The overall stagnation of the European economy suggests that, while complying with the ECB's mandate, a more accommodative interest rate environment would be desirable," Giorgetti wrote in the budget document seen by Reuters.
Italy's budget plan approved by the cabinet late on Thursday estimated that interest spending on the public debt will rise from 3.9% of GDP in 2025 and 2026 to 4.1% in 2027 and 4.3% in 2028.
The debt -- the second highest in the euro zone after Greece's -- is targeted at 136.2% of gross domestic product this year from 134.9% in 2024, and seen rising further to 137.4% in 2026.
It will then decline marginally to 137.3% in 2027 and 136.4% in 2028 when it will still be above this year's level, according to the budget document seen by Reuters.
(Reporting by Giuseppe Fonte, editing by Gavin Jones)
Key Takeaways
- •Italy urges ECB to lower interest rates.
- •Euro zone economy is near-stagnant.
- •ECB's current deposit rate is 2.0%.
- •Italy's public debt interest spending is rising.
- •Debt projected to rise to 137.4% of GDP by 2026.
Frequently Asked Questions about Italy says ECB should cut rates more to address euro zone stagnation
1What is the European Central Bank (ECB)?
The European Central Bank (ECB) is the central bank for the eurozone, responsible for monetary policy, including setting interest rates and maintaining price stability across its member countries.
2What is monetary policy?
Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
3What is GDP?
Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a country's borders in a specific time period, used as a broad measure of overall economic activity.
4What is interest rate?
An interest rate is the amount charged by a lender to a borrower for the use of assets, typically expressed as a percentage of the principal, and can influence economic activity and inflation.
