Im Schatten des Staates.

This article analyses the rise of public debt in Italy since the 1970s. It argues that Italy's path into debt differed from other countries of Southern Europe. Rather than historical path-dependencies, both the macro-economic conditions during the 1970s and the specific interests of the institutions involved in the debt management can explain the countries growing deficits. The article shows how the Italian central bank was able to increase its institutional power, while the financial sector profited from the trade in government bonds and treasury certificates. The high saving rates of private households, which financed a huge part of the public debt, explain why there have been no dramatic bank insolvencies or external debt crises in Italy since the 1970s. [ABSTRACT FROM AUTHOR]