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On 28 December 2018, Italy issued government bonds maturing in 2028 at an effective interest rate of 2.7%1. Interest rates like this combined with the scale of Italian public debt (157% of GDP) mean Italian taxpayers spend more on public debt interest than they do on education. In 2015, Italy spent 4.1% of GDP on public debt interest and only 2.8% of GDP on education.
This week, Switzerland issued bonds maturing in 2030 at an effective interest rate of -0.041%2. Negative interest rates like this mean Switzerland sometimes makes money borrowing.
Buyers of Swiss bonds are reckoning on the stability of the Swiss franc and the near certainty of repayment.
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