MILAN, June 8 (Reuters) - Italy’s fiscal situation is such that any government can only take measures that have a limited impact on public finances or it risks pushing the country off a cliff, the central bank governor warned on Friday.
The anti-establishment 5-Star Movement and right wing League party have formed a coalition government after agreeing on a set of measures whose cost is estimated by economists at more than 100 billion euros.
Italy’s 2.3 trillion-euro public debt is the third largest of any country in the world and runs at more than 1.3 times the country’s domestic output.
On public finances, Italy “must not take a step longer than its leg, as it risks falling off a cliff,” Bank of Italy Governor Ignazio Visco said at an event in Milan. (Reporting by Luca Trogni Writing by Valentina Za Editing by Hugh Lawson)