Why is Italy’s public-debt burden so big?

One thing everyone knows about Italy is its huge public debt. At almost 150% of GDP, it is admittedly smaller than Japan’s. Like Japan, Italy has mostly run a current-account surplus, making it less dependent than, say, Britain, on the kindness of strangers. But Japan’s debt is mostly in its own currency, a chunk is owned by its central bank, and much of the rest is held by domestic savers (only 7% is foreign-owned). Many rich Italian savers also hold its debt, but some 45% of the stock is foreign-owned. And it is denominated in what is, in effect, a foreign currency: the euro. Hence the interest in lo spread—the difference in yields between Germany and Italy.