The milestone is particularly notable in a country long associated with political instability \u2014 a problem heightened by the 2010 to 2012 euro zone sovereign debt crisis \u2014 with 68 governments serving over 80 years.<\/p>\n
“Frequent changes in government is becoming normal in other countries, and stability is becoming normal in Italy. Amazing,” Paolo Gentiloni, Italian prime minister between December 2016 and June 2018, told CNBC’s Carolin Roth.<\/p>\n
“At the same time, [Meloni’s record is] good for a certain caution in public finances that brought our spread down. But this is all, and longevity is not something sufficient for a government.”<\/p>\n
Gentiloni said Italy had seen a “very good rebound” following the pandemic, which has slowed in the last two to three years.<\/p>\n
Italy’s economy grew by 0.5% over the course of 2025, below the euro area average of 1.5% and one of the slowest rates in the bloc<\/a>. The Italian employment rate remains solid, but youth unemployment stood at 18.9% in July, above the euro area average of 14.9%. <\/p>\n “This, of course, is a failure,” Gentiloni said. “In the last two or three years, we see the [spending] power of families going down, and this is a reason for the government not to be so satisfied as it’s looked.”<\/p>\n Mario Monti, prime minister of Italy from 2011 to 2013, told CNBC that Meloni had stayed the course because she was a “very smart politician” \u2014 and because “she has not done much.”<\/p>\n “She has carefully avoided those confrontations with segments of society that might have modernized the economy through an injection of more competition and competitiveness, but which would have cost her political consensus,” Monti, now president of the Javotte Bocconi Institute, said.<\/p>\n Italy needs structural reforms, including a clampdown on tax evasion, full application of its competition laws, and a willingness to “inject more vitality” into the economy “through a bit more destructive creation,” Monti said. <\/p>\n Meloni’s premiership is being closely watched in France and Germany, both of which are seeing increased political success for far-right parties. <\/p>\n “It is true that power softens extreme positions,” Monti said, addressing the view that Meloni has proved more pragmatic than her populist, right-wing pitch to voters<\/a> had suggested. <\/p>\n “That is why nobody now…would go for exit from the EU or exit from the euro. But if there is lack of willingness to accept some political confrontation, this gives yes more stability, but a lack of growth and deterioration of society, and even the youngest and brightest in the country wants to leave it,” Monti said.<\/p>\n Enrico Letta, who led an Italian coalition government from 2013 to 2014, said that “not so good” economic performance and fraught inter-European relations were dampening sentiment toward Italy despite its internal political stability. <\/p>\n “Stability is a value, but what is really important is the stability of the relationship among European countries. I was not happy [about] all this summer of conflicts on immigration, on Schengen, and so on,” the dean of the IE School of Politics, Economics and Global Affairs told CNBC.<\/p>\n European nations must prioritize cooperation on immigration, trade wars, security and inflation, and finalize the EU’s long-awaited Savings and Investments Union and single regulatory framework if the bloc wants to attract more international investment, Letta said. <\/p>\n Deficit turnaround<\/p>\n Meloni inherited an Italy that was politically divided<\/a> and fraught with fiscal problems. <\/p>\n At the time, concerns were rife about the country’s budget deficit, which stood at 7.2% of gross domestic product. When the deficit swelled to 7.4% of GDP in 2023, Italy was put under the European Union’s excessive deficit procedure<\/a>, which sets a reference value of 3% for government deficits. <\/p>\n Since then, the deficit has fallen sharply, coming in at 3.1% in 2025. The European Commission expects<\/a> the figure to fall to 2.9% this year, thanks to higher employment and wages delivering greater government revenues. <\/p>\n Stock Chart IconStock chart icon Italian 10-year government bond yield<\/p>\n As the deficit has fallen, so have Italian government bond yields, with the spread between Italian and German bond yields narrowing drastically since late 2022<\/a> \u2014 suggesting investors now demand a lower risk premium to hold Italian bonds over their German counterparts. The spread between French and German bond yields has widened significantly<\/a> over the same period. <\/p>\n However, Rome \u2014 like many of its G7 counterparts \u2014 still has a massive debt problem. Italy’s debt-to-GDP ratio reversed its downward trajectory in 2024, according to EU data, driven mainly by a Covid-era policy giving tax credits for housing renovations. In 2025, debt-to-GDP stood at 137.1%, and is forecast to rise to 138.5% this year.<\/p>\n Bond boost<\/p>\n![\"chart](\"https:\/\/www.europesays.com\/italy\/wp-content\/uploads\/2026\/09\/thumbnail.jpeg\")
‘Power softens extreme positions’<\/p>\n![\"Meloni](\"https:\/\/www.europesays.com\/italy\/wp-content\/uploads\/2026\/09\/108358860-17885182421788518239-48171511769-1080pnbcnews.jpg\")
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