According to the most reliable estimates, the increase in public spending needed to contain the COVID-19 pandemic and the resulting economic damage to businesses and households could reach 80–100 billion, which would push Italy’s debt-to-GDP ratio above 150%. The concern is that a further rise in public debt, at a time when similar measures are likely to be needed in other Eurozone countries, could lead to higher interest rates, adding to the overall fiscal cost. Therefore, it seems important to explore ways to make interventions of this magnitude politically and economically sustainable. The European Commission has proposed activating the “general escape clause,” which suspends the Stability Pact and gives countries affected by the pandemic full budgetary flexibility. Two days earlier, the ECB announced an emergency program to purchase public and private securities (PEPP) worth 750 billion euros through the end of 2020, in addition to the additional 120 billion euros of Quantitative Easing already announced on March 12 as an initial response to the emergency.

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