Barclays says Italy's debt burden sustainable, likely to remain high

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“The key contributor is the structurally low core interest rates and the ECB’s commitment to putting a cap on Italian spreads,” Barclays said, referring to the European Central Bank’s massive asset purchase scheme.

In a major new report on debt in developed markets, Barclays estimated the euro area debt-to-GDP was likely to increase to around 100% in 2020 from around 85% in 2019. It said the debt/GDP ratio may reach 165% in Italy.

Barclays analysts said the bar for a new euro zone debt crisis was high versus 2010-12, noting a sharp fall in financing costs.

They added that they expected the U.S. debt/GDP ratio to increase almost 30 percentage points over the next two years.